Chevron Corp. agreed to buy Noble Energy for about $5-billion in shares as the oil giant looks to beef up in the Permian Basin amid the wreckage of the worst-ever crude crash.

The takeover is the industry’s first major deal since the coronavirus triggered a severe slump and the largest since Occidental Petroleum outbid Chevron to acquire Anadarko Petroleum for $37-billion last year.

The deal will grow Chevron’s presence in both the Permian, once the main driver of the shale boom, and the Denver-Julesburg Basin in Colorado. Its proved reserves will rise by about 18%. Buying Noble also enlarges Chevron’s footprint in the Eastern Mediterranean by adding the Leviathan gas field off the coast of Israel.

“These are high-quality assets at a fair price,” Chevron CEO Michael Wirth said in an interview with Bloomberg TV Monday. “This isn’t just about the Permian Basin. Noble’s got a very impressive position in the Eastern Mediterranean, West Africa, a nice position in Colorado.”

Noble was up 5.8% to $10.21 at 11:37 a.m. in New York. Chevron dropped 1.3% to $86.06.

Consolidation in the shale patch has been largely non-existent this year as the combination of a severe oil-price slump and pressure on companies from investors to return cash leaves explorers with little firepower to make deals. Globally, energy mergers and acquisitions total about $132-billion so far this year, including the Chevron deal, according to data compiled by Bloomberg. That’s down by almost 60% year on year.

On a conference call to discuss the takeover, Noble CEO Dave Stover was quizzed by analysts over why he accepted Chevron’s offer, given that just five months earlier his company had a market value of nearly $9-billion, 80% higher than what the supermajor agreed to pay.

“The way we looked at it is, in a stock-for-stock transaction, it maintains the upside exposure and minimizes the downside risk,” he said. “Scale really matters here.”

Analyst at RBC Capital Markets were unimpressed. “Our conversations with investors indicate that most see the acquisition premium as a bit low and are left wondering why the board of directors sold at that valuation,” RBC analyst Scott Hanold wrote in a note.

Chevron has shown interest in buying up distressed shale producers before. Wirth said it was the unique combination of Noble’s nearby, high-quality Permian assets, the huge Israeli gas operation as well as the DJ Basin that got the deal done.

“We get asked a lot about pure-play Permian,” Wirth said on the call. “We’re already big in the Permian. Getting bigger isn’t necessarily the goal; getting better certainly is important.”

Last year, Chevron lost the takeover battle for Anadarko but ultimately walked away the victor with a $1 billion break-up fee as oil prices plunged. Occidental won with a higher bid, but has subsequently struggled with the large debt pile resulting from that deal. Its shares are down about 75% since the Anadarko saga began.

After Anadarko, Noble was among the top four potential candidates that Chevron could have gone after as it closely resembled Anadarko’s portfolio at a smaller scale, Bob Brackett, an analyst at Bernstein, said Monday in a note to investors.

“We still don’t embrace the Permian M&A theme as a money maker,” Brackett wrote.