CRZO merger with SM Energy

[dan_s]

This is just a rumor, but the combination of these two does make sense.

Read: https://finance.yahoo.com/news/sm-energ ... 01023.html

SM Energy is the larger company, so a stock-for-stock deal that gives current CRZO shareholders a 30% to 40% stake in the combined company makes the most sense to me. Stock-for-stock deals are non-taxable (unless some cash is part of the deal).

[dave_n]

While I was in SEC website, took a look at filings for CRZO and SM Energy.

On Feb 12, SM Energy disclosed hiring Causeway Capital Management as an Advisor.

https://www.sec.gov/Archives/edgar/data ... 4q2018.htm

Also some beneficial ownership disclosures by State Street Bank for CRZO, SM AND OAS. That could be just a fund allocation shift, but I find it curious...

One thing to note, State Street Advisors was on SC 13G for all three... Got me wondering....

SM SC 13G
https://www.sec.gov/Archives/edgar/data ... -index.htm

OAS SC 13G
https://www.sec.gov/Archives/edgar/data ... eumInc.txt

CRZO SC 13G
https://www.sec.gov/Archives/edgar/data ... GasInc.txt

[dan_s]

If someone can combine CRZO, SM and OAS they would have one hell of an upstream company with over 250,000 BOE per day of current production and a clear path to 300,000 BOE per day by end of this year. Plus, pick the best people at CRZO to run the Eagle Ford, the best at SM to run the Permian Basin and the best at OAS to run the Bakken. Very interesting.

[dave_n]

Look at OAS May 17, 2019 option open interest!!!

Open interest for CRZO April 18, 2019 options also very high.

Virtually nothing open for SM.

[dan_s]

SM is the likely "Buyer" of CRZO or OAS since it is larger.

Way back in my "consulting days" I actually worked on a deal to roll three companies into one. DNR would have been the surviving company. The problem is getting all three companies to agree on the terms. Great concept but hard to do.