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(Wall Street Journal) Here’s how bad things are getting in the oil patch: In some cases it is now cheaper for energy companies to buy one another rather than drill for crude.

A year-and-a-half on from the start of the worst crude-oil price crash in a generation, the biggest U.S. and European energy companies have delayed projects and made such deep budget cuts that they will soon struggle to replace the oil they pump out of the ground with new reserves. That conundrum could have serious implications for Exxon Mobil Corp. XOM -0.01 % , BP BP 0.02 % PLC, Chevron Corp. CVX 0.09 % and Royal Dutch Shell RDS.A 2.97 % PLC because oil-and-gas reserves are critical to evaluating their growth prospects.

Exxon and its peers are set to begin reporting fourth-quarter earnings this week, starting with Chevron on Friday. Analysts estimate that combined profits at the four biggest publicly traded Western oil companies will be about $22 billion, the weakest results since 1998, according to S&P Capital IQ. Shell, Chevron, Exxon and BP declined to comment.

Facing poor returns for drilling and severe challenges to long-term growth, some big oil companies have little choice but to turn to deals, said Anish Kapadia, an energy analyst at Tudor Pickering Holt & Co.

“The obvious conclusion is to go out and buy something,” he said. “The valuations are getting quite attractive.”

Past energy downturns drove many of the biggest oil companies to strike deals, with big companies buying smaller rivals such as Anadarko Petroleum Corp. APC 2.49 % ’s takeover of Union Pacific Resources in 2000. Equally matched energy conglomerates also lashed themselves together the last time oil traded in a $20-a-barrel range in the late 1990s, including Exxon’s tie-up with Mobil and Chevron’s with Texaco. Deal-making is likely to return this year if prices continue to languish around $30 a barrel, or drop ever further, analysts say. “If prices stay this low, we’re going to see much more distressed companies and that will drive M&A,” said Luke Parker, research director at Wood Mackenzie. Then again, any signs of a sustained recovery could also prompt an uptick in deals as companies look to start spending again, he added.

Bankers and analysts have been predicting a wave of deals almost since crude prices began to fall from over $100 a barrel in the summer of 2014, but they never materialized. Last year was the slowest year for oil-and-gas transactions […]