Even a broken clock is right twice a day and it’s Monday - which means…. I get to talk about a merger!! Callon announced it will acquire Carrizo in an all stock transaction which will create a premier, best in class, oil weighted company with scale and scope and range and depth and height…. blah blah blah. All meaningless words. However- lots of real things to talk about. CPE stock will get crushed: the irony...

Isn’t that sweet??! A joint press release! (Also known as: what happens when the Rice nominees win over the EQT nominees. The existing management at EQT is checking their contracts to understand the phrase “diminution of duties” and book tee times for early August.) But now the real work begins. The asset is still the asset and all the leadership change in the world doesn’t make gas prices $3/mcf. Or even $2.50. At...

It’s quiet. Too quiet! For all my begging and pleading to start the consolidation process or companies with clearly no future to declare Chapter 11 already … only two measly mergers happened in Q2. Oxy-APC and Comstock-Covey Park. Oh. And 1 merger of equals … Midstates and Amplify. Nonetheless, it’s becoming hard to be “an energy commentator” when there is nothing to provide commentary on. Here’s hoping for some fireworks...

Do you think the hype about independents being acquired (following APC foot steps) is legitimate? If so - who would be the next to go in your opinion? First. Yes. Strongly. There is limited to no new capital interested in coming into the industry and what capacity there is - is debt… my view in debt is like Charlie Munger: “there are only three ways a smart person can go broke: Liquor, ladies and leverage and the...

Every Monday morning, I wake up full of excitement and expecting that at long last, like Noah’s Ark, Management Teams pair up two by two and announce deals they negotiated over the weekend. Alas. My hopes are crushed and it turns out like the last 10 seconds of a basketball game: with four TV time outs, 10 fouls, a bunch of anticlimactic hyperbole and takes 30 minutes to reach the foregone conclusion. Make no mistake, the...

Every Monday morning, I wake up full of excitement and expecting that at long last, like Noah’s Ark, Management Teams pair up two by two and announce deals they negotiated over the weekend. Alas. My hopes are crushed and it turns out like the last 10 seconds of a basketball game: with four TV time outs, 10 fouls, a bunch of anticlimactic hyperbole and takes 30 minutes to reach the foregone conclusion. Make no mistake, the flood waters are rising. The data on corporate hedging -...

It might just be me, but I think that Rice and EQT aren’t going to be on each other’s Christmas card list this year. The letter battle of “who’s prettier” continues and their stock is the 3rd worst performer over the last month- down 20%. Oh, and did I mention gas is below $2.50/mcf and they produce.... gas. Entertaining though it is - no amount of management is going to fix the fact that gas is a priced in such a way that returns are...

Comstock Resources.... come on down!! YOU are the next contestant on “Can That Price Be Right?!” If you want to understand just how horrible the M&A market is, this deal is pretty instructive: a $470 mm company with $1.25b in debt is making a $2.2b acquisition of Covey Park, a Denham PC using a big equity infusion from Jerry Jones and allowing (forcing?) Denham to receive $170 mm in stock. Add $400 mm of 10% preferred stock .... and you create a “Haynesville Basin leader”. If...

And now, we return to our regularly scheduled and topical hottakes. And what a week it’s been!! We have to go all the way back to Monday when Amplify and Midstates agreed to a merger of equals (that’s not a real thing by the way, but sounds good in a press release). Many, many more to come so a good start. Pioneer annnouced quarterly results with the strangest asset sale I’ve ever seen. A $450 mm divestiture for which they receive $25 mm today and...

Thank you for your interest in Anadarko. I know right now you are thinking about raising your bid but I don’t think you should and here’s why (in case the people working for you don’t write in bullet form memos... on LinkedIn) 1. You get a billion break fee! Not bad for writing an offer. You planned to increase the buyback from $4b to $5b after the acquisition anyway- now it’s free money and you can still do. 2. You were going to sell $15-$20b...