Comments on: The Near-Term Situation with the Oil & Gas Industry https://www.frackcheckwv.net/2015/02/16/the-near-term-situation-with-the-oil-gas-industry/ Just another WordPress site Wed, 14 Feb 2024 02:06:39 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: S. Thomas Bond https://www.frackcheckwv.net/2015/02/16/the-near-term-situation-with-the-oil-gas-industry/#comment-160765 S. Thomas Bond Tue, 17 Feb 2015 16:13:26 +0000 http://www.frackcheckwv.net/?p=13856#comment-160765 From today's news: Friday's Wall Street Journal (Is the Exxon Tiger Ready To Pounce?), suggested that Exxon Mobil could make a bid for BP, which has lost many billions from the Deepwater Horizon oil spill. BP has a current value of $127 billion, and debt of $22.6 billion. A takeover of BP might cost Exxon $175-$200 billion in stock. While the company has bought back enough shares over the last 15 years - roughly $346 billion - to issue equity for such a deal (as they did with XTO). But, it's not clear how that will benefit ordinary shareholders. The XTO (shale drilling) purchase certainly has not. If the XTO takeover is any indication, after Exxon paid for the deal with stock, they then went back to putting a big priority on share buybacks over the dividend. This is a long-survival tactic by a company desperate for reserves. Investors are not it's first concern. From today’s news: Friday’s Wall Street Journal (Is the Exxon Tiger Ready To Pounce?), suggested that Exxon Mobil could make a bid for BP, which has lost many billions from the Deepwater Horizon oil spill.

BP has a current value of $127 billion, and debt of $22.6 billion. A takeover of BP might cost Exxon $175-$200 billion in stock. While the company has bought back enough shares over the last 15 years – roughly $346 billion – to issue equity for such a deal (as they did with XTO).

But, it’s not clear how that will benefit ordinary shareholders. The XTO (shale drilling) purchase certainly has not. If the XTO takeover is any indication, after Exxon paid for the deal with stock, they then went back to putting a big priority on share buybacks over the dividend.

This is a long-survival tactic by a company desperate for reserves. Investors are not it’s first concern.

]]>