Established over a century ago, Gibson, Dunn & Crutcher has emerged as a major player in the energy deals market, amassing more than $90 billion worth of energy deals this year, outperforming any other law firm. This achievement comes six years after the firm, originally known for their litigation practice, made the strategic decision to open an office in Houston.
While multiple leading law firms have attempted to make their mark in Texas over the last decade to tap into the profitable energy M&A market, none have achieved success at the pace of Gibson Dunn. The key to the firm’s success, according to Texas legal recruiter Tim Regan, lies in their patient and strategic approach. The firm chose to enter the market with notable lateral groups from different firms, investing significantly in their foundational partners.
According to Bloomberg Law, the firm’s impressive ascent in the energy deals rankings is attributed to Gibson’s calculated investment in expanding its oil and gas practice in Houston in 2017. Attorney Michael Darden, co-chair of Gibson Dunn’s oil and gas practice, was among the professionals who joined the Houston office that year.
In building out its Houston team, the firm bolstered its ranks with hires from both Apache Corporation and Baker Botts. Last year, the firm snagged an investment funds partner from Simpson Thacher & Bartlett, James Hays, who spearheads the firm’s fund formation practice in Houston. Additionally, Gibson Dunn recently welcomed Kirkland partner Rahul Vashi, a seasoned attorney with clientele including Northern Oil & Gas Inc. and Devon Energy Corp, to co-chair the oil and gas practice group with Darden.
Gibson Dunn’s rise takes place during a downturn year for M&A, where energy deals have emerged as bright spots. Such transactions are vital revenue sources for major corporate law firms. In a significant October pairing of blockbuster energy deals, Gibson Dunn played a pivotal role in advising ExxonMobil on the $59.5 billion sale to Pioneer Natural Resources, contributing to a fourth-quarter transactions volume surpassing $158 billion in the sectors of coal, oil, gas, pipelines, and alternate sources.
The firm’s success isn’t confined to U.S. borders; it’s made its presence felt in the overseas energy market as well. Earlier this year, Gibson Dunn’s Dubai partners consulted for Abu Dhabi National Oil Company and ADNOC Gas on the record-breaking IPO of ADNOC Gas, marking the largest-ever listing on the Abu Dhabi Securities Exchange.
Commodity prices and stability have been driving factors in the surge, with high commodity prices from Russia’s invasion last year allowing companies to stabilize balance sheets and generate significant cashflow. Relative stability in prices, equity, and valuations in the ensuing period have further facilitated this upward trend.
In recent years, numerous national firms have descended upon the state seeking a piece of the Texas energy market. Among them, Latham & Watkins and Kirkland & Ellis led the charge, opening their Houston offices in 2010 and 2014 respectively. Despite their significant presence and deep pockets, Davis Polk, without even a Texas office, secured second place in the energy league tables, coming in right behind Gibson Dunn.
As Gibson Dunn continues to expand its energy practice, it remains vigilant of the growing competition in Texas. Clifford Chance, a UK “Magic Circle” firm, opened an office in Houston earlier this year with a 10-partner team dedicated to energy infrastructure transactions.
As this wave of new entrants to the Texas energy market continues to build, it seems Gibson Dunn’s strategic patience and investment in their foundational teams has positioned them well for success.