{"id":82815,"date":"2009-12-15T05:34:00","date_gmt":"2009-12-15T10:34:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/with-xto-acquired-by-exxon-here-are-the-next-players-to-get-snapped-up-2009-12"},"modified":"2009-12-15T05:34:00","modified_gmt":"2009-12-15T10:34:00","slug":"with-xto-acquired-by-exxon-here-are-the-next-players-to-get-snapped-up","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/82815","title":{"rendered":"With XTO Acquired By Exxon, Here Are The Next Players To Get Snapped Up"},"content":{"rendered":"

\"gas2\"The Houson Chronicle’s Tom Fowler<\/a> rounds some thoughts from the analysts and commentariat in regards to yesterday’s huge acquisition of XTO (XTO) by Exxon (XOM):<\/p>\n

What does it mean for other E&P companies?<\/strong> Simmons & Co.<\/strong><\/a> asks:<\/p>\n

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“This transaction will likely set a bid under the E&P group today as the best capitalized and historically most conservative company moves decisively further into unconventional NAM natural gas. The transaction can’t help but imply a vote of confidence in both the potential resource size in shale gas and in the majors outlook for North American natural gas prices <\/strong>(XOM holding more exposure to swing Qatari LNG of any major). Companies that will likely garner immediate attention as take out candidates are CHK, EOG, SWN, RRC, APC, DVN, etc.”<\/p>\n<\/blockquote>\n

What does it mean for services firms (drillers etc.)?<\/strong> they also ask:<\/p>\n

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“Negative<\/strong>, particularly if today’s transaction becomes a trend. Unlike JV’s, where the majors bring capital to continue development, an outright company-level acquisition of this magnitude is typically followed by slowed development in the midst of portfolio high grading<\/strong>; a negative for NAM drilling and service companies.”<\/p>\n<\/blockquote>\n

Simmons also observes that XTO has hedged 53 percent of its 2010 production at $9.62\/mcf. Exxon generally doesn’t use such hedges, so it will be interesting to see if they stick or are liquidated.<\/p>\n

CreditSights <\/strong><\/a>notes the deal “removes one of the five largest independent North American E&Ps, leaving only four independents remaining<\/strong> who have the scale that would likely be attractive to the Integrateds\/Super Majors – Anadarko (APC), Devon (DVN), EnCana (ECA), and Chesapeake (CHK).”<\/p>\n

Tudor Pickering & Holt <\/strong>says the deal will “probably” kick off a major consolidation trend because “majors tend to be lemmings around trends like jvs\/consolidation<\/strong>“. Their list of likely targets includes EOG, SWN, HK, ECA, DVN, CHK, APC.<\/p>\n

Join the conversation about this story »<\/a><\/p>\n

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