Anadarko is abandoning a takeover bid for Apache after its rival spurned an all-stock offer.
The company confirmed a bid, first reported this week by Bloomberg, but said Wednesday that Apache rejected its offer to enter into a confidential agreement to explore a deal, adding that no substantial discussions took place.
Shares of both companies slid along with the price of oil, which fell 3 percent. A barrel of oil was going for less than $43 Wednesday, which is part of the reason why tie-ups are so difficult for energy companies even in a time of falling energy prices and falling stock prices for energy companies.
It has become extremely difficult to come to an agreement about the value of an energy company with the price of oil and gas swinging wildly.
Earlier this month, Chesapeake took an impairment charge of more than $5.4 billion, largely because it wrote off the value of its oil and gas properties. The value of that land, however, would rise if energy prices rebounded.
The price of crude has been cut in half this year, but in the past five weeks oil has alternated between gains and losses, and will likely do so again this week.
"We are unwilling to pursue the transaction without access to detailed non-public information, and based on our analysis, which shows that Apache appears to trade at or near full value currently, the offer was withdrawn," Anadarko Chairman and CEO Al Walker said in a printed statement.
Anadarko said only that its offer was a "modest premium," for Apache shares. A company spokesman declined to comment further when contacted Wednesday by The Associated Press.
An Apache representative did not immediately return a call from The Associated Press seeking comment.
Shares of Anadarko Petroleum Corp. fell nearly 4 percent, or $2.45, to $60.97 in midday trading. Apache stock fell 6.6 percent, or $3.53, to $49.78.