[Editor's note: A version of this story appears in the September 2020 issue of Oil and Gas Investor magazine. Subscribe to the magazine here.]

As 2020 crawls through the third quarter, the strains on M&A and the oil and gas industry are beginning to take on albatross-ian levels.

China is abiding by its energy trade agreement with the U.S. quarter-heartedly (roughly one ventricle). The People’s Republic committed to importing $18.5 billion more in U.S. energy products annually. Through June, China’s purchases are an undazzling $1.3 billion, according to the Peterson Institute for International Economics.

As the election nears, fears that a Democrat president could institute fracking bans are matched only by the actual lack of fracking being done. The oil rig count has spiraled down to 172, the lowest since 2005, according to Simmons Energy.

And, of course, there’s the coronavirus, which has definitively answered the age-old question, “If there was a COVID-19 infection party, what would you wear?”

Within this confluence of stupid and infuriating, M&A is becoming more an act of artistic license than profitability. Companies continue low premium, all-stock deals that have no immediate accretiveness, apart from tossing costs down the G&A garbage disposal.

The benefits of M&A arguably are still important but seem to lean more toward the macro side. Brian Singer, an analyst with Goldman Sachs, recently suggested shale industry M&A could function as a kind of self-imposed speed limit: Combined companies are likely to drive oil growth slower.

This comes as companies are already looking to put less money into operations and more into investor’s pockets. The deals themselves continue to show that high premium deals have far overshot their sell-by dates.

Companies are courting each other but practicing safe sales. To paraphrase Rick Blaine, companies “stick their neck out for nobody.”

Consider Chevron’s merger with Noble Energy, for which the San Ramon, Calif., company threw in a little loose change in the form of a 7.4% premium.

Why accept so little? Noble Energy’s internal deliberations may help explain. Noble held a July meeting with advisers to mull over its options: merge, acquire something or go it alone. Noble’s go-it-alone option, even in a best-case scenario, would leave the company weakened with no ability to reach its pre-downturn metrics of 1.5x debt/EBIDAX—by 2029, Wells Fargo Securities analyst Roger Read said.

Gas deals, curiously, have shown some recent strength. Southwestern Energy’s merger with Montage Resources, however, was viewed by analysts as only slightly needle moving. And Tudor, Pickering, Holt & Co. viewed it as another data point in the continuing trend of low-to-no premium merger.

But several companies also moved smaller assets. Antero Resources found a buyer for its dry gas production stream in West Virginia to the tune of $220 million over the next seven years. Range Resources will collect up to $335 million for the sale of some of its gassy assets in North Louisiana. And Kalnin Ventures LLC, backed by Banpu Plc of Thailand, agreed to move up its purchase of Devon Energy’s Barnett Shale assets.

Christopher Kalnin, CEO of BKV Corp. and Kalnin Ventures, said in a brief interview that his company pushed for a quicker closing.

“The main rationale for the timing change is that we have become more bullish on the gas markets for Q4 2020 and FY 2021,” Kalnin said. The emergent gas deal emerges from a backdrop of confusion, according to Enverus founder Allen Gilmer.

Gilmer said in an interview that deals are bogged down by uncertainty—not just of pricing but consternation over what’s really of value.

“People are scared,” Gilmer said. “They don’t have a grasp as to whether [acreage] is valuable or not.” Gilmer said Enverus is already seeing companies become more aggressive on acreage they already own and the acreage around them.

Deals center on extended lateral lengths or companies just buying what’s near them. But even smaller companies with strong balance sheets and free cash flow, such as Magnolia Oil and Gas Corp., PDC Energy Inc. and Comstock Resources Inc., could be looked over by picky buyers because of limited inventory or, in PDC’s case, the mental state of Coloradans.

As Gilmer noted, the M&A market is cold, at least for now.

“With regards to people going out and doing that kind of on a speculative basis, it hasn’t started yet,” he said. “But I suspect some money will go into that.”

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