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  1. #151

    Default Re: Any new economic developments?

    M&A is going to be bananas in the O&G over the next 24 months.

    Locally,

    Chk has too much debt they’ll just continue to operate.
    CLR will either buy someone or hold serve. Hamm owns too many shares for Wall Street or PE to have an effect.

    DVN is likely going to get bought or merge. (Marathon/EOG, they have highly similar assets. Scale would help.) That’s an 80% chance. 20% chance they buy someone.

    Chaparral, Roan, SD will all get bought up. Roan is actively being marketed.

    Gulfport will keep just chugging along.

    The smaller PE backed guys like Echo, ascent, revolution will likely stay private. They might jump up and take out a SD as a reverse merger, helps avoid an ipo and all the fees associated with that. Plus Wall Street hates hates hates O&G right now.

  2. Default Re: Any new economic developments?

    Quote Originally Posted by gopokes88 View Post
    M&A is going to be bananas in the O&G over the next 24 months.

    Locally,

    Chk has too much debt they’ll just continue to operate.
    CLR will either buy someone or hold serve. Hamm owns too many shares for Wall Street or PE to have an effect.

    DVN is likely going to get bought or merge. (Marathon/EOG, they have highly similar assets. Scale would help.) That’s an 80% chance. 20% chance they buy someone.

    Chaparral, Roan, SD will all get bought up. Roan is actively being marketed.

    Gulfport will keep just chugging along.

    The smaller PE backed guys like Echo, ascent, revolution will likely stay private. They might jump up and take out a SD as a reverse merger, helps avoid an ipo and all the fees associated with that. Plus Wall Street hates hates hates O&G right now.
    Yes, definitely have been hearing rumblings about DVN. Nothing concrete but it is concerning. Selling Canada for nearly $4 Billion made them a really attractive takeover target but also gave them the cash to make an acquisition. Hopefully for OKC the latter happens.

  3. #153

    Default Re: Any new economic developments?

    Devon isn't nearly as big as it once was.

    They are turning into Chesapeake and SandRidge: slowly and methodically shrinking.

  4. Default Re: Any new economic developments?

    Quote Originally Posted by Pete View Post
    Devon isn't nearly as big as it once was.

    They are turning into Chesapeake and SandRidge: slowly and methodically shrinking.
    Yes they have shrunk a lot but the assets they still own in the Permian, Eagleford, Powder River Basin, and to a lesser extent the STACK, are high tier acreage in those plays. Unlike CHK and SD, they have strong, oil rich assets and have been able to eliminate a lot of their debt which makes them a really attractive acquisition target.

    CHK has shrunk quite a bit, but the Wild Horse acquisition grew them slightly.

  5. #155

    Default Re: Any new economic developments?

    ^

    Just meant that if something happened to Devon, it wouldn't necessarily be an economy-crushing event.

    Chesapeake has slowly dwindled from about 5,000 employees at its peak in 2012, and now has only about 1,500 on their payroll. That's a loss of a whopping 3,500 highly-paid jobs in 7 years.

    And a lot bigger number than currently working for Devon.

  6. #156

    Default Re: Any new economic developments?

    Almost seems like people are hoping Devon or Chesapeake go under, with how doom and gloom this board makes it seem.

  7. Default Re: Any new economic developments?

    Quote Originally Posted by Pete View Post
    ^

    Just meant that if something happened to Devon, it wouldn't necessarily be an economy-crushing event.

    Chesapeake has slowly dwindled from about 5,000 employees at its peak in 2012, and now has only about 1,500 on their payroll. That's a loss of a whopping 3,500 jobs in 7 years.

    And it's a lot more jobs than currently working for Devon.
    Certainly wouldn’t be a good thing but you’re right, it wouldn’t have the impact that it would’ve a few years ago.

  8. Default Re: Any new economic developments?

    Quote Originally Posted by jonny d View Post
    Almost seems like people are hoping Devon or Chesapeake go under, with how doom and gloom this board makes it seem.
    No one is hoping for it. Just stating likely scenarios.

  9. #159

    Default Re: Any new economic developments?

    Quote Originally Posted by Pete View Post
    ^

    Just meant that if something happened to Devon, it wouldn't necessarily be an economy-crushing event.

    Chesapeake has slowly dwindled from about 5,000 employees at its peak in 2012, and now has only about 1,500 on their payroll. That's a loss of a whopping 3,500 highly-paid jobs in 7 years.

    And a lot bigger number than currently working for Devon.
    I think the big loss would be the high level management positions. The total number of jobs can be absorbed, but those $200,000+ per year jobs are going to be hard to recoup. I'm guessing there are no less than 50 positions in OKC that are at that salary level.

    Obviously that won't be a full loss as those people have the (access to) capital to start new ventures and many won't phone it in. But some may, and some may leave, and it wouldn't be an inconsequential amount of loss.

  10. #160

    Default Re: Any new economic developments?

    There were tons of people at CHK making over $200K a year that have been laid off.

    Our economy is a lot bigger and more diverse than ever, and the fact we've absorbed the loss of 3,500 very high-paying jobs from Chesapeake without anyone really noticing is the best example.

    It also goes to show that these big oil companies are not nearly as important to our local economy as people think. Even in the O&G industry, there has been a big shift towards small- and medium-sized operators.

  11. #161

    Default Re: Any new economic developments?

    Quote Originally Posted by jonny d View Post
    Almost seems like people are hoping Devon or Chesapeake go under, with how doom and gloom this board makes it seem.
    Oh no itíd be awful for a multitude of reasons. Losing a Fortune 500 company is never good.

    But if Devon canít start generating good FCF in the next 4-6 quarters, the investors will push for a sale.

    The asset sales were a move to position to do that. They have very very low debt now and are in 3/4 best shale assets.

  12. #162

    Default Re: Any new economic developments?

    Quote Originally Posted by Pete View Post
    There were tons of people at CHK making over $200K a year that have been laid off.

    Our economy is a lot bigger and more diverse than ever, and the fact we've absorbed the loss of 3,500 very high-paying jobs from Chesapeake without anyone really noticing is the best example.

    It also goes to show that these big oil companies are not nearly as important to our local economy as people think. Even in the O&G industry, there has been a big shift towards small- and medium-sized operators.
    The winds are shifting a little bit, size is what’s going to matter.

    Big O&G used to come in a take out a smaller PE backed company for the acreage in the field. PE would back these small companies hoping for a huge windfall. That’s not really happening anymore. We’re out of the exploration part of the cycle, and in the development part of the cycle. So the PE money has stopped flowing, growth isn’t the focus, FCF is.

  13. #163

    Default Re: Any new economic developments?

    If Devon gets sold or merged that doesn’t necessarily spell doom and gloom for their operations here. That tower is a tremendous facility, few oil companies have HQ’ers that match it.

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