"Even Talisman"? The remainder of 2000 is shaping up as a busy time for mergers and acquisitions in the oil patch
The Globe & Mail, April 6
VOX
The Canadian oil patch is entering the "carnivore" stage of the business cycle where the strong take out the weak. Case in point is Dallas-based Hunt Oil's bid for Calgary-based Ulster Petroleums, a company that's been penalized by investors for exploration disappointments. Hunt's $512-million bid signals a new consolidation wave that's set to sweep the oil patch. Four factors promise to make the remainder of 2000 a busy year for mergers and acquisitions:
Energy companies are flush with cash from booming oil and gas prices and the strong have built up war chests for acquisitions; the outlook for oil prices has stabilized now that cartel oil producers have agreed to curb production; oil and gas company shares, although still cheap, look poised for a runup, especially if technology jitters continue; and, lastly, prospective bidders have finally got their hands on 1999 year-end reserve estimates for oil companies that were due out by March 31.
This allows would-be bidders their best snapshot of potential targets since reserve estimates were last released a year earlier when the oil patch was still recovering. All this means Ulster is just the beginning. Any company that's seen to be stumbling, or whose shares are lagging, is at risk. On that list: Beau Canada Exploration, Berkley Petroleum, Renaissance Energy or even Talisman Energy, whose stock is still suffering because of its Sudan exposure. |
