Stock market rout doubles pain for energy firms that took shares for deals

- Energy investor EnCap Investments pulled off a rarity in the U.S. shale business earlier this month, the $2.5 billion sale of oil producer Felix Energy to rival WPX Energy Inc, striking a deal at a time when energy mergers have all but dried up.

EnCap’s big payday, 153 million WPX shares valued at $1.6 billion plus $900 million in cash, proved short-lived as convulsing oil and stock markets knocked nearly two-thirds off the value of WPX shares within days of the closing. Many already are reeling from oil prices that last week fell the most in a decade, to about $31 a barrel, and falling demand from an global economy weakened by the coronavirus. The magnitude of the price drop will hurt the companies’ ability to borrow against their newly-less-valuable reserves of oil and gas.

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