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As Exxon (XOM) falls behind in discovering untapped oil fields, it may be forced to buy what it...

As Exxon (XOM) falls behind in discovering untapped oil fields, it may be forced to buy what it cannot find, some analysts say. Anadarko (APC) could be an M&A candidate because utilities from Singapore to Seoul would pay a premium to import gas it finds off Mozambique’s coast. EOG could rejuvenate XOM with its oil-rich reservoirs in the Eagle Ford shale in Texas.
Comments (5)
  • I think it would make more sense to go after several smaller US names with lots of acreage and drilling locations, because XOM could drill faster, and with a lower cost of capital.
    26 Oct 2012, 05:59 PM Reply Like
  • Tough to really move the needle with small acquisitions when you have the size of a Exxon Mobil. The amount of work required to close a deal is significant. This is the point the author is making as well - XOM needs to do something big and not just incremental - i.e. the biggest independents like APC, EOG or APA.

     

    EOG seems to one dimensional (US tight shales).

     

    APC out of action as a M & A candidate until Tronox resolved.

     

    APA in play with mix of domestic and international opportunities.

     

    Tullow, listed on the LSE, would be another name I would throw into the ring as a major acquisition candidate.
    27 Oct 2012, 06:40 AM Reply Like
  • Moving the needle with a big acquisition didnt work well with Range Resources. I think XOM, or any of the majors for that matter, will see better returns by going after smaller names that lack the funding and infrastructure to really exploit the acreage they have, and go from there. XOM could pick up 3 or 4 companies and get a huge foothold in the Bakken, Utica, or DJ Basin, bringing the money and expertise of a major. I agree it won't be game changing for XOM, but the company made $41 bil in 2011, so its going to be hard for any deal to move the needle significantly.
    28 Oct 2012, 11:40 PM Reply Like
  • XOM made a conscious decision to focus away from oil and towards nat gas; right now oil is where the money's at, so it appears XOM made a bad call, the trick is whether the current situation will hold. For all we know XOM's strategy may be proven the best option in the not distant future.

     

    Not yet though.
    26 Oct 2012, 06:13 PM Reply Like
  • Doubtful Exxon will acquire big in the US again doesn't anyone remember the Markey hearings and the talk of monopoly (maybe if BHO fails to gain a second term but not likely). XTO was the big acquisition contrary to short sighted analysts it gave them the personnel with the knowledge in unconventional plays and a strong foothold in all the major shale plays (gas and oil) it lead to their continental oil and gas volumes skyrocketing and they don't look to be slowing down. From there they have done over a hundred acquisitions (some publicized some not ) bolting on to those existing holdings and increasing the strength of their XTO division. For more wildcat situations and properties where Exxon bulk may be a hindrance Exxon has partnered with Bob Simpson (Founder of XTO) in a 50/50 private venture. Bottom line why would EXXON be a white knight and come in and save these independents that are seriously hemorrhaging when they can eat them one asset sale @ a time taking only what they want and leaving the rest for the scavengers. I my self look at these acquisition articles with a very jaded eye.
    28 Oct 2012, 10:25 PM Reply Like
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