Stephen Simpson, CFA • 21 Comments
Richard Zeits • 55 Comments
Chris Driftman • 35 Comments
Nov. 17, 2014, 3:59 PM
- In the wake of Halliburton's (NYSE:HAL) $34.6B offer for Baker Hughes (NYSE:BHI), it appears the next hot sector for M&A action is energy: More consolidation is likely, given the weakness for stocks in the oilfield services subsector, low interest rates, and as a drop in demand for oil increases cutthroat pricing competition.
- Speculation is running rampant as investors try to figure out who is next in an industry that is sure to undergo some more consolidation; some names identified as possible candidates include Kodiak Oil and Gas (NYSE:KOG), Marathon Oil (NYSE:MRO), Northern Oil and Gas (NYSEMKT:NOG), Anadarko Petroleum (NYSE:APC), Pioneer Natural Resources (NYSE:PXD).
- GE could go after National Oilwell Varco (NYSE:NOV) to show it is serious about the energy industry after last year’s purchase of pumpmaker Lufkin, Royal Bank of Canada says, and Oppenheimer says even BP could be an acquisition candidate.
- But Morgan Stanley does not see offshore drillers getting in on the action, as larger players like Diamond Offshore (NYSE:DO), Transocean (NYSE:RIG) and Seadrill (NYSE:SDRL) are still addressing dividend concerns while smaller companies such as Atwood Oceanics (NYSE:ATW) and Pacific Drilling (NYSE:PACD) still trade close to replacement value.
Jul. 15, 2014, 12:45 PM
- Whiting Petroleum (WLL -0.5%) and Kodiak Oil & Gas (KOG +0.2%) don't just share prolific Williston Basin oil fields; they also share many of the same investors - with five of WLL's top 10 shareholders also among KOG's top 10 - which should help them win shareholder approval for their proposed merger despite WLL’s $3.8B bid valuing KOG at a discount to Friday’s closing stock price, SunTrust analysts say.
- Wells Fargo analysts add that KOG CEO Lynn Peterson has much of his net worth in wrapped up in the company, and that Peterson and his team have tried unsuccessfully for years to sell the company.
- KOG is upgraded to Buy with a $17.70 price target at Wunderlich, believing the stock should trade in tandem with WLL, on which the firm has a $100 price target.
Jul. 14, 2014, 3:45 PM
- Shares of Whiting Petroleum (WLL +7.8%) surge to a new all-time high as analysts agree that WLL pulled off a great deal for Kodiak Oil & Gas (KOG +4.6%), paying ~2% less than KOG's Friday close and just 5% above the 60-day average (earlier).
- WLL’s story grows even more compelling with an accretive deal that gives it a premier position in both the Bakken and Niobrara that should boost growth dramatically, likely with improved metrics across the board that already are at compelling levels vs. peers, Wunderlich says in reiterating its Buy rating.
- In raising its price target to $102, Brean Capital says it would not be surprised to see a competing bid for KOG, but assuming the deal closes as currently constituted, its opinion of WLL is only enhanced as the most attractive opportunity in its coverage universe (Briefing.com).
- Meanwhile, KOG’s decision to sell now is “curious,” according to Sterne Agee's Tim Rezvan, with a Q2 earnings miss possibly explaining the move; KOG has not set a date to release Q2 results.
Jul. 14, 2014, 2:21 PM
- Whiting Petroleum's (WLL +7.4%) $6B buyout of Kodiak Oil & Gas (KOG +5.1%) is renewing investor attention on independent energy firms with operations in the Bakken Shale, especially those significantly owned by hedge funds; Paulson & Co. is the single biggest owner of KOG stock, with just under 10% of shares outstanding as of the last filing date.
- While many of the largest Bakken producers are huge companies or parts of huge companies - Hess (NYSE:HES), EOG, Statoil (NYSE:STO), Marathon Oil (NYSE:MRO), XTO Energy (NYSE:XOM) - a few small and mid-cap independent players show hedge fund interest, CNBC's Brian Sullivan writes.
- The single biggest holder of Oasis Petroleum (OAS +0.5%) also is John Paulson's hedge fund, which owns 9.9M shares (~9.8% of shares outstanding), Jana Partners owns 16M-plus shares in QEP Resources (QEP +1.4%), and WPX Energy (WPX +1.1%) has substantial hedge fund ownership.
Jul. 14, 2014, 1:44 AM
- Whiting Petroleum (WLL) will acquire Kodiak Oil & Gas (KOG) creating North Dakota's largest Bakken shale producer. During the first quarter, total combined output of the two companies was more than 107k barrels of oil per day from the Bakken/Three Forks formations.
- The deal is valued at $6B, including $3.8B in stock and $2.2B in net debt, and is expected to close in Q4. Kodiak shareholders will receive 0.177 share of Whiting stock for each share of Kodiak common stock they own.
- "It's going to allow our production at the combined company to grow faster than Whiting standalone did before," says Whiting CEO James Volker. "The combined company will have greater access to capital which will accelerate development of oil production."
Sep. 17, 2013, 5:05 PM
- In an apparent delayed reaction, companies mentioned as possible takeover targets for Repsol (REPYY.PK, REPYF.PK) as it reportedly looks to make a North American oil acquisition in the $5B-$10B range moved higher today.
- After showing only mild action yesterday, Whiting Petroleum (WLL +3.7%) and Kodiak Oil & Gas (KOG +1.6%) posted strong gains gains; strength in SandRidge Energy (SD +6%) also may have been sparked by Respol speculation, although SD wasn't mentioned in this weekend's WSJ article.
Sep. 16, 2013, 11:45 AM
- Repsol (REPYY.PK -1%) is downgraded to Neutral by Credit Suisse after a WSJ weekend report that the Spanish oil major is ready to spend $5B-$10B for a U.S. or Canadian E&P company.
- Credit Suisse says Repsol is likely to conduct a careful search for the right buyer or buyers for its €4.5B ($5.97B) stake in Gas Natural.
- While the WSJ report is long-term positive for Repsol, in the short term its effect is muted by the need to complete the Gas Natural divestment first, as financing for Spanish corporations remains relatively expensive.
- Shares of potential U.S. targets Kodiak Oil & Gas (KOG +0.8%) and Whiting Petroleum (WLL +0.2%) show slight gains.
Sep. 15, 2013, 7:38 PM
- Repsol (REPYY.PK) is looking to spend $5-$10B on a North American E&P company as the Spanish oil major seeks to gain a foothold in "stable-market" economies after the Argentina debacle imperiled the company's investment-grade rating, WSJ says.
- Companies mentioned in the article as possible targets based on their size and perceived willingness to pursue a deal include Whiting Petroleum (WLL) and Kodiak Oil & Gas (KOG) - those names may get a lift from the article come Monday.
Jul. 11, 2013, 10:31 AM
Kodiak Oil & Gas (KOG -0.8%), long rumored as an acquisition target, reportedly hired bankers last year to help it field interest from potential suitors; talks with the suitors apparently fizzled, but KOG continues to work with the banks. Factoring in debt and some premium to its current share price, KOG would represent a ~$4B ticket for an acquirer, which seems to have chased away most interest.| Jul. 11, 2013, 10:31 AM
Oct. 18, 2012, 12:32 PM
Natural gas prices likely will remain range-bound at $3-$4/MMbtu until there's a structural change on the demand side, Oppenheimer's Daniel Katzenberg says. But that doesn't mean the sector will be boring, as he anticipates M&A activity will pick up, expecting attention in Bakken and Permian names such as WLL, KOG, AREX and PXD.| Oct. 18, 2012, 12:32 PM | 2 Comments
Oct. 17, 2011, 9:38 AM
Jul. 15, 2011, 10:39 AM
BHP's (BHP -1.5%) willingness to pay a 65% premium for Petrohawk (HK +62.7%) shows that mining companies will pay top dollar for natural gas plays (UNG +2.5%), despite the stubbornly low price of the commodity itself. JPMorgan's Mark Lear says acquisition targets could include: RRC +6.6%, BEXP +6.1%, KOG +5.7%. Also surging: COG +7%, CHK +6.7%.| Jul. 15, 2011, 10:39 AM | 3 Comments