The rumor mill in the oil patch was working overtime Thursday, with
speculation that Apache Corp. would buy Ultra Petroleum Corp., ExxonMobil
Corp. would go for Devon Energy Corp., and Nabors Industries Ltd. CEO Gene
Isenberg would finally take the drilling giant private in a management buyout,
as has been rumored for awhile. Devon's stock shot up 2.2%, Ultra's jumped 5%,
and Nabors' rose 1.9%, all outperforming benchmarks.
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All three scenarios make logical sense:
-
Apache would make a big splash buying a company, rather than just its
assets, as it usually does, and Ultra is sitting on very valuable properties
in Wyoming's Green River Basin;
-
cash loaded-ExxonMobil wants to get deeper into the natural gas-rich Barnett
Shale of North Texas, where Devon rules;
-
Isenberg would like to not have to deal with the vagaries of the stock
market and regulators, as evidenced by his company's move to Bermuda several
years ago (which saved the company a bundle on taxes).
But Dan Pickering, principal of Houston energy investment bank and research
firm Tudor Pickering & Co. Securities Inc., wrote in a note Friday morning
that investors long on those stocks started talking up the combinations so
they'd have a nice markup at the end of the quarter. "Call us cynics, but the
irony is, it worked," he said. His advice to those who might be thinking of
buying those three based on the takeover rumors: "Chase at your own peril." —
Claire Poole
See
related story about Devon from BloggingStocks
See
related story about Exxon from CNNmoney
See
earlier post from Dealscape
