Exxon buying out Chesapeake?

I keep hearing this so what do you all think?

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Permalink Reply by v on January 13, 2009 at 11:34
The oil sand play in Canada is figured at $40.00 per barrel.
Permalink Reply by Ms.Dragonslaya on January 12, 2009 at 8:12
Is there a chance Exxon will buy out Exco Production??? They are drilling horizontal wells in SECTION 24, T14N-R13W or is Exco too small for them to consider buying???
Permalink Reply by Beer Store on January 12, 2009 at 8:46
WSJ

Monday, January 12, 2009

Exxon Mobil Corp. is riding high above its peers, its coffers filled by years of high oil prices. Now, energy investors are wondering if Exxon is ready to make a move.

Already the world's largest publicly traded company, measured by both profit and market capitalization, Exxon is poised to grow even bigger by acquiring a rival energy company or entering a partnership with an oil-rich nation in need of capital, an array of industry experts believe.


Exxon is "sitting pretty," says Philip Verleger, an oil consultant and professor at the University of Calgary. "They have money and [now] there are a lot of companies that are desperate."

The oil giant has remained mum about future deals. "We monitor opportunities all the time: companies, their performance, their own situation. We continue to do that," Mr. Tillerson said last week when asked about plans for its repurchased shares. "If we think the value is good, we certainly have the capability and the wherewithal to do something. But if we're not convinced the value is good, then we don't have to do anything."

Exxon's strength comes not just from its balance sheet, but from a deep management bench with the experience and talent to pull off a major acquisition or investment, observers say.

Few in the industry expect Mr. Tillerson to keep his powder dry much longer. "Having maintained discipline during the boom years, just sitting there during the down cycle will frustrate his shareholders. He'll be considering action," says Deutsche Bank analyst Paul Sankey.



Mr. Tillerson recently talked up Exxon's ability to help finance multibillion dollar oil investments. Because Exxon can provide its own financing for projects, he said, it's easier for host governments and national oil companies to "secure financing because we're not out competing for that same financing dollar."

If Exxon makes a deal, Mr. Tillerson won't have to look far to find it.

Says Fadel Gheit, an oil analyst at Oppenheimer & Co. who used to work for Mobil: "It is very nice to have a AAA credit rating and $40 billion in cash. Deals come to you."
Permalink Reply by J R Kelly on January 12, 2009 at 8:52
I had heard a couple of months age that BP would take Chesapeake out in February. It just makes since for a major to make a move on or take advantage of Chesapeake. Chesapeake has a lot of reserve but, unfortunately, just not enough cash to manage it.

But Aubrey got his 75 million bonus!!
Permalink Reply by USARMYMSG on January 12, 2009 at 10:47
What does it matter? Chesapeake or Exxon as long as one drills in my section and production with royalty begins. That is my prayer.
Permalink Reply by adubu on January 12, 2009 at 12:42
If XOM does anything to increase their NG play in the shale they would buy CHK and other E&P assets leases and leases HBP without any of CHK liabilties and debt. They are too smart to buy CHK out right.
Permalink Reply by Grillin' - MmmMmm on January 13, 2009 at 5:50
I don't think CHK would sell them the assets. The only way to buy CHK's prize assets right now is a corporate deal, and probably a hostile one at that. Aubrey doesn't want to sell the company so XOM or others would have to go to the Board and Shareholders. But for the right amount, wouldn't Aubrey be ready to "flip" this baby? Flip factor??
Permalink Reply by Dorcheated A1 on January 20, 2009 at 3:28
Just watch the stock. It will tell you all you need to know.
Permalink Reply by Cathaus on January 20, 2009 at 3:35
A good indicator is Aubrey's hair! The more concerned he is, the wilder his hair becomes. LOL
Permalink Reply by Lerret on January 13, 2009 at 8:41
At one time there was a good relationship between the two companies. My understanding is that Chesapeake is in a big hole and if not for good hedging upon their part would already be in crisis. As it is, I suspect they would sell out to a good offer but they likely will survive.

Truth is they bought a way too many leases for a way too much money and many many, if not most of the acreage, will not get drilled. That is a waste of resources and created some very high expectations from landowners. Other oil companies will have their work cut out for them to lease fresh leases and many are probably prospecting Chesapeake leases in hopes of making a deal with CHK to farm out to them. And CHK will farm out huge tracts to others because if they don't they will lose the total investment without even being able to evaluate the leases.

if things start popping again then what?If you are bankrupt it won't matter. CHK is heavily leveraged and has a huge debt position. They are not producing gas. They are finding it then selling it up front in Multiple Limited Partnerships (MLPs)...then charging the investors for drilling and managing the reserves. If the Investors lose money, the whole thing spirals out of control downward.
Permalink Reply by Grillin' - MmmMmm on January 13, 2009 at 11:59
Except CHK has not formed any MLP's. They have joint ventures which are highly leveraged in their favor. But the "spiral" you speak of is not real. The only spiral is gas prices, which they are protected on for a year or so. Beyond that, they may have to let some leases go.
Permalink Reply by v on January 13, 2009 at 11:24
As of wed. of last week at 6.30 pm XOM had 36 billion in cash.

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