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Wonder who's going to grab their assets. Maybe Exxon? Still a lot of oil in the fracking areas.

by jdhn 6y ago

adventured 6y ago
The majors rarely buy when they should, they only buy when they shouldn't (price based acquisition fever). Happens over and over again, with the latest being Occidental and Anadarko. The industry is almost universally stupid when it comes to acquisitions. Notice Exxon and Chevron didn't launch any big acquisitions during the extreme implosion in the industry with the pandemic. They always go into hunker down mode at the wrong time. Why haven't they stepped in to take out Occidental + Anadarko (the Anadarko deal was valued at a comical $55 billion)? They want to wait until the combination's current $16b market cap rebounds back to $35b (and then pay $42b for the deal), so they can be sure of what they're doing. And since Occidental paid so much for Anadarko by itself, they'll pat themselves on the back that they're paying a good price. Exxon bought XTO Energy (natural gas heavy) in Dec 2009 in an all-stock deal initially valued at $41b (plus an assumed ~$11b in debt). They bought them shortly after the natural gas price bubble crashed (I'm sure they thought it was a good deal) and right before shale production would permanently bury natural gas prices. Another classic poorly timed acquisition disaster in the industry. Analysts at the time of course overwhelmingly praised the deal as smart (calling XTO's price cheap). If anyone scoops up Chesapeake coming out chapter 11, most likely it will be private equity types specializing in energy markets. Then Exxon will buy it from them at a huge price increase in seven or eight years, right before an oil crash.
empath75 6y ago
Not worth getting in the near future.
rurounijones 6y ago
I am more wondering about who is going to pay for clean-up in the event that projects are left half-finished due to the bankcruptcy.

Wonder who's going to grab their assets. Maybe Exxon? Still a lot of oil in the fracking areas.

by jdhn 6y ago

Wonder who's going to grab their assets. Maybe Exxon? Still a lot of oil in the fracking areas.

The majors rarely buy when they should, they only buy when they shouldn't (price based acquisition fever). Happens over and over again, with the latest being Occidental and Anadarko. The industry is almost universally stupid when it comes to acquisitions. Notice Exxon and Chevron didn't launch any big acquisitions during the extreme implosion in the industry with the pandemic. They always go into hunker down mode at the wrong time. Why haven't they stepped in to take out Occidental + Anadarko (the Anadarko deal was valued at a comical $55 billion)? They want to wait until the combination's current $16b market cap rebounds back to $35b (and then pay $42b for the deal), so they can be sure of what they're doing. And since Occidental paid so much for Anadarko by itself, they'll pat themselves on the back that they're paying a good price. Exxon bought XTO Energy (natural gas heavy) in Dec 2009 in an all-stock deal initially valued at $41b (plus an assumed ~$11b in debt). They bought them shortly after the natural gas price bubble crashed (I'm sure they thought it was a good deal) and right before shale production would permanently bury natural gas prices. Another classic poorly timed acquisition disaster in the industry. Analysts at the time of course overwhelmingly praised the deal as smart (calling XTO's price cheap). If anyone scoops up Chesapeake coming out chapter 11, most likely it will be private equity types specializing in energy markets. Then Exxon will buy it from them at a huge price increase in seven or eight years, right before an oil crash.

empath75 6y ago

Not worth getting in the near future.

rurounijones 6y ago

I am more wondering about who is going to pay for clean-up in the event that projects are left half-finished due to the bankcruptcy.