Two Acquisitions, Two Selloffs: Key Takeaways from Recent M&A Activity in the US Onshore Market
We explore the lessons from the market’s reaction to Oasis Petroleum’s recently announced asset purchase in the Permian Basin and Noble Midstream Partners LP’s new joint venture in the Denver-Julesburg Basin.
Focus List
We have increased our exposure to exploration and production companies in recent months, focusing on names with solid balance sheets and franchise assets that legitimately could live within cash flow. Third-quarter results from these companies were a mixed bag, though their stocks have rallied.
Upstream Takeover Targets
Some of the biggest winners from mergers and acquisitions activity in the US upstream space have been the acquirers. Deal flow will continue to focus on assets and private-equity outfits monetizing their investments. We prefer names with solid balance sheets and exposure to franchise assets with low production costs; these names will continue to take market share, outperform their and grow their inventories of potential drilling locations.
On the Radar
Shares of many exploration and production companies have rallied too far, too fast. However, investors will profit from exposure to names that can win market share in an environment where crude oil ranges between $40 and $60 per barrel–provided that they bide their time and buy at the right price. We highlight a handful of names to keep on your radar screen.
In the Portfolio
Our strategy of buying our favorite upstream oil and gas companies at dream prices has paid off with impressive returns. We update our investment theses for these names as well as our buy targets and dream prices.
 |
|||
 |
 |
 |
|
 |
|||
 |
 |
||
 |
|
|
|
Live Chat with
Elliott and Roger on Jan. 30, 2020
Portfolios & Ratings
Model Portfolios
Balanced portfolios of energy stocks for aggressive and conservative investors.
Producers and Drillers
Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.
MLPs and Midstream
Our assessment of every energy-related master limited partnership.
International Coverage
Roger Conrad’s coverage of more than 70 dividend-paying energy names.
Experts
-
Elliott H. Gue
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor
-
Roger S. Conrad
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor