Are more mergers just ahead?

[dan_s]

Several of our model portfolios companies are mentioned below.

Note from Roth MKM

The recent purchase of ESTE by PR in an all-stock $4.5bn deal at a 15% premium has a lot
of investors wondering if we are on the cusp of an M&A boom in the E&P sector. We think that
we will see more deals, but that it will be at a measured pace going forward. We also think
that some of the recent sales of small-cap E&Ps to larger publics have come out of frustration
around low valuations for smid-caps vs. larger entities, and we may see other smid-caps try
and capture higher multiples through consolidation with all-stock deals with larger E&Ps. Our
top candidates to sell out are CRK, MTDR, PR and SM, and our top candidates to potentially
buy other E&P companies are COP, CTRA, DVN, EQT, FANG, MRO and OXY. WTI oil prices
have fallen about 7% over the last few weeks on increasing concerns over the fate of the global
economy as PMI data for the euro zone and the UK for August has been weak and some major
Chinese property developers have missed interest payments this month. We expect to see a
continued battle between weaker economic data and resolve from OPEC+ to restrict supply
and to reduce global oil inventories to continue to play out in 2H23. Ultimately, we think OPEC
+ and lower inventories will eventually prevail and will lead to WTI oil prices moving higher
once again over the next few months.
Leo Mariani, CFA, Managing Director

[aja57]

"Small and mid-cap oil stocks are cheap, but the market just doesn't care,"

https://www.tradingview.com/news/DJN_DN20230822008796:0/

[dan_s]

They will notice when Q3 results are better than Q2 and Q4 results are better than Q3.

The Big Paradigm Shift is just in the 2nd inning of a long game.