Another Big Oil take-under

As written in previous posts, the trend continues.

Conoco Phillips bids for Texan shale producer, Concho Resources for US$9.7 billion in COP stock.

Never heard of them, they have more revenue than Woodside Petroleum.

Well, Concho’s previous day’s market cap was $9.6 billion.
After receiving the ‘take-under’ approach, today, CXO’s stock fell 2.8%. Hardly a resounding response, mainly because COP’s stock fell 3.2%.

Note that no cash is involved…..COP is using stock…..sadly COP share price has halved in the past 9 months……that’s quite telling.

Conoco’s market cap in January 2020 was US$70 billion. Now, it’s US$35 billion.

It’s an overt scramble to replace depleting reserves in absence of exploration capex.

This year, Devon Energy merged with WPX Energy and Chevron buys Noble Energy – all using stock, not (cheap) debt.

October 20, 2020
by Rob Zdravevski
rob@karriasset.com.au