The big news out of the energy patch this week is Halliburton’s (NYSE: HAL) $35 billion purchase of rival Baker Hughes (NYSE: BHI), announced Monday. Halliburton is so committed to getting this deal done that the world’s second-largest provider of oilfield services tacked a $3.5 billion breakup fee onto the deal if it cannot get done due to regulatory concerns.

Thanks to lingering weakness in oil prices, the Market Vectors Oil Service ETF (NYSEArca: OIH), an ETF that devotes nearly 17% of its combined weight to Halliburton and Baker Hughes, has fallen 1.3% this week. The rival iShares U.S. Oil Equipment & Services ETF (NYSEArca: IEZ), which devotes a combined 16.2% of its weight to Halliburton and Baker Hughes, is off 1.5% this week.

Predictably, oil prices loom large for ETFs like OIH and IEZ and it is those low oil prices that are seen as key motivator behind the Halliburton/Baker Hughes deal as well as further deal-making in the industry. [Oil Services ETFs Get Some Good News]

“Primarily, S&P Capital IQ views the move as a defensive one based on the macro concern that crude oil prices might weaken further. As of today, West Texas Intermediate crude oil is selling for about $75 per barrel, down from more than $100 per barrel earlier this summer. At a $75 price point, we think most shale plays in the U.S. are still economic for upstream customers. However, based on data from Bentek Energy (a unit of McGraw Hill Financial, as is S&P Capital IQ) if prices were to fall another to the $60 per barrel range – which is just a 20% move away – all of a sudden, the economics don’t look quite so rosy, with a smaller subset of plays still worth pursuing, and others not,” said S&P Capital IQ in a new research note.

With fears rising that oil decline could be one of the protracted variety, oil services consolidation could increase as larger firms look for cost synergies. S&P Capital IQ identified Weatherford International (NYSE: WFT) and Superior Energy Services (NYSE: SPN) as potential takeover targets in the oil services group.