I didn't have time to respond immediately, but when I did, it appeared the activity was consistent with all the general oil and gas activity this week, and I didn't think the trading activity suggested WLL was in play at this particular time. Both the correspondent and I agreed that WLL is often talked about as a possible takeover candidate.
But it appears I may be wrong, and there may be fire where there is smoke, as they say. From Wall Street Cheat Sheet:
Shares of Whiting Petroleum Corporation took off on chatter that the company will put itself up for sale, along with Thursday’s option action, in which almost 5,400 September $52.50 calls changed hands, which was well above open interest of fewer than 1,900 contracts. Whiting’s potential suitors are reportedly Apache Corporation, Chevron Corporation, Occidental Petroleum Corporation, and Royal Dutch Shell.The MDW alluded to Shell as a possible new Bakken entrant in an earlier post. Hooah!
WLL: market cap -- $6 billion; suitor needs to have $12 billion price tag in mind
Apache: $26 billion market cap; needs to increase oil exposure; only $360 million cash;
Chevron: $230 billion market cap; lots of cash; in best position to do this, but does it need to?
OXY: $75 billion market cap; only $4 billion in cash; operating cash similarly low
RDS: $227 billion market cap; similar cash position to CVX; Shell is ready and game
So, are they after it because it will buy CO2 from the Odessa clean coal plant? See link in that topic.
ReplyDelete;-)
Anon 1
And that's why I love to blog; I never know what somebody might notice.
DeleteAnother rumor out there is that Denbury sold out to a sub of XOM supposedly to be announced in q1 13
ReplyDeleteVery, very interesting. Thank you. Keeps the blog interesting.
DeleteAlthough I was the one who predicted Whiting wouldn't be independent within five years, I am not happy to see it happen too soon. It's inevitable the bigger fish will gobble the smaller ones in the Bakken. However, I don't think that is a positive while we're still in the exploration phase. 'Small' operators (WLL, CLR, OAS, KOG, etc...) are much more focused on maximizing each little piece of their play. Simply put the Bakken/ Williston Basin represents the core of each of these companies. As a result their attention is there.
ReplyDeleteWhen the Exxon, Chevron, & Shell's are the players suddenly that 12,000 acre leasehold over here, or that 30,000 net acres there, are not so important. Would these companies allocate the same dollars to the Bakken projects when their internal competition for the cap/ex dollars is with the Caspian Sea, Indonesian, or Nigerian projects? I fear something like Whiting's "Big Island Prospect" would fall through the cracks if the majors are in charge.
It's a different matter after development is done. The majors can manage a field more effeciently than the little guys. Yet before then I'd rather have the smaller companies out chasing their dreams developing their lands. The buyouts are coming... let's just hope it's later rather than sooner.
That's my two bits, Eastern MT
Hopefully, the deals won't take place for awhile....it's possible it was still just chatter.
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