Dan Pickering, chief of Houston research firm Pickering Energy Partners Inc. who comments on energy companies every trading day in his morning note (and also provides sometimes unfunny jokes), made a bold prediction this morning: that some sort of takeover rumor surfaces tomorrow.
Last week was the rumor (again) about Houston oil explorer Noble Energy Inc. (market capitalization: $10.8 billion) buying crosstown explorer Newfield Exploration Co. (market cap: $6.6 billion), pushing Newfield's stock up 9.5% on six times the normal volume June 1 to close at $52.61 per share (it's since settled down to $50.14 at the close Wednesday). The week before, tongues wagged about Houston oil services provider BJ Services Co. (market cap: $8.6 billion) buying crosstown provider W-H Energy Services Inc. (market cap: $1.9 billion), pushing W-H's price up almost 3% May 25 to $62.62 per share (except for a dip the next trading day, it's been trading higher and closed Wednesday at $63.44).
Neither was a particularly bad rumor: Combining both sets of companies would give them economies of scale, cost savings and more competitive heft, and both have complementary assets. But with oil prices pretty high right now, oil producing properties are fetching a pretty penny, which doesn't bode well for a Noble-Newfield marriage. And the newly fanged Federal Trade Commission might take a hard look at a BJ Services-W-H hookup, having given merging oil services companies flack before. Have any of the rumors turned out to be true? "Nope!" retorts Pickering in an e-mail. But tomorrow is another day. —Claire Poole
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