Possible M&A Target companies - Sept 26

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Possible M&A Target companies - Sept 26

Post by dan_s »

The Morgan Stanley Energy Sector Research Team sent out an interesting report this morning.
They see the upstream sub-sector as ripe for increased M&A.

Here is their list of "Hypothetical" acquisitions and mergers that they believe make sense.

Acquisitions:
CVX acquires Cimarex Energy (XEC)
XOM acquires Diamondback (FANG) and/or Pioneer (PXD)
They believe the majors will pay ~30% premium to the current market value for these three Sweet 16 companies.

Mergers of equals to gain scale and reduce costs:
MRO + DVN
OAS + WLL
RRC + SWN
AR + MR
CNX + AR
GPOR + MR
HPR + BCEI
XOG + HPR

There is a lot of good information in this report, including a table that shows which companies will be generating the most free cash flow from operations in 2020.
Send me an email if you'd like to read the full report: dmsteffens@comcast.net
Dan Steffens
Energy Prospectus Group
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