We show how industry-specific factors can be important determinants of takeover probability in the oil and gas industry. Several of the significant explanatory variables are industry related, such as the common factor oil price, or the more firm-specific factor of oil and gas reserves. We find that oil price is negatively linked to takeover likelihood, implying that oil and gas companies change their investment policy in a low oil price environment. They lower their exploration investments and increase acquisitions of other companies. In addition, we find that the takeover likelihood is associated with other nonindustry metrics such as firm-specific return on equity, under-valuation (book-to-market ratio), expected stock market volatility (Chicago Board Options Exchange volatility index) and general stock market returns.