Against all odds: US M&A 2020
Oil & gas dealmaking hit hard by pandemic

Oil & gas dealmaking hit hard by pandemic

Deal activity in the oil & gas sector was severely impacted by the COVID-19 pandemic, as commodities prices plummeted

Explore the data

Create custom charts using the latest data on global M&A
M&A Explorer

Although oil prices have recovered from the depths they reached in the spring— when the price of the benchmark West Texas Intermediate crude briefly fell below zero—they remain approximately 15 percent below what they were at the end of 2019.

Faced with headwinds, the oil & gas sector delivered only 118 transactions in 2020, 43 percent below the total for the previous year. Deal value fell 47 percent to US$82.4 billion.

Moreover, the bulk of total deal value was accounted for by just three deals—ConocoPhillips’ US$13.3 billion bid for Concho Resources, Chevron’s US$12.6 billion takeover of Noble Energy and Berkshire Hathaway Energy Company bidding US$9.7 billion for Dominion Energy’s gas transmission and storage assets.

US $82.4 billion
The value of 118 deals targeting the US oil & gas sector in 2020


Consolidation activity

Where deals have proceeded, a primary driver has been to consolidate asset positions and build production scale that is sustainable at lower oil prices. The ConocoPhillips bid for Concho, for example, will form the largest US independent producer, with production capacity of 1.5 billion barrels per day. Concho’s strong balance sheet coupled with soft stock market valuation also informed the rationale for the transaction.

Chevron’s purchase of Noble Energy was also a consolidation play, boosting Chevron’s shale portfolio with the addition of close to 1 billion cubic feet of natural gas reserves. An attractive valuation and minimal competition from rival bidders, given headwinds in the sector, also supported the investment by Chevron.

Percentage decrease in value compared to 2019


Rise in bankruptcies

The prolonged period of low oil prices also led to an uptick in distressed and restructuring situations in the sector, with companies that had increased leverage in favorable lending markets pre-pandemic found to be particularly vulnerable. North American oil & gas bankruptcy filings over the first three quarters increased from 33 in 2019 to 40 in 2020. Although this has not yet led to a marked increase in distressed M&A deals, it may in 2021, as clarity on valuations emerges and investors eye a hoped for transition to post-pandemic life.

Top oil & gas deals 2020

1: ConocoPhillips acquired Concho Resources for US$13.3 billion

2: Chevron acquired Noble Energy for US$12.6 billion

3: Berkshire Hathaway Energy acquired a number of gas transmission and storage assets from Dominion Energy for US$9.7 billion


Click here to read the full magazine
Against all odds: US M&A 2020


This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
© 2021 White & Case LLP