one MEEN Ag said:

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Leaks like that get out because they don't want the deal to go through, or they want to see what the market reaction is.

That's not just a banker with inside knowledge letting something slip.

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either COP is running it up the flag pole to gauge market interest or an insider doesn't like the deal and is hoping to kill it.

Furlock Bones said:

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one MEEN Ag said:

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Leaks like that get out because they don't want the deal to go through, or they want to see what the market reaction is.

That's not just a banker with inside knowledge letting something slip.

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either COP is running it up the flag pole to gauge market interest or an insider doesn't like the deal and is hoping to kill it.

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Wouldn't a leak benefit CXO due to an increased premium? Very curious to see what happens here over the next month.

Interesting since at one time, COP had a large presence in Midland. They had 3-4 buildings off of 3300 North A then moved everyone to Houston some years back. If they do acquire COG, I'm thinking they may run it like Exxon/XTO until recently.

Nah- that is not how conoco rolls. also, they have expertise in shale unlike xom at time of acquisition.

Yeah, that won't be how COP handles it. They also have folks in Hobbs and Carlsbad.

Wonder when Cimarex gets picked up. Don't know much about their debt load though.

PeekingDuck said:

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Wonder when Cimarex gets picked up. Don't know much about their debt load though.

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Hopefully this will be chevron's next acquisition.

txaggie_08 said:

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Furlock Bones said:

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one MEEN Ag said:

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Leaks like that get out because they don't want the deal to go through, or they want to see what the market reaction is.

That's not just a banker with inside knowledge letting something slip.

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either COP is running it up the flag pole to gauge market interest or an insider doesn't like the deal and is hoping to kill it.

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Wouldn't a leak benefit CXO due to an increased premium? Very curious to see what happens here over the next month.

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Its more of a process of elimination. The lawyers very rarely directly leak the info. Its not in their interest as they want the deal done to get paid, and an easy way to get fired/get disbarred. That leaves the executive teams and the bankers who are involved in the deal. Bankers just want to make a quick buck on the side, they don't tell Bloomberg about it. They tell their buddies quietly over dinner in a loud restaurant. Executive teams want to gauge market reactions or blow up deals. And executive teams tell things to Bloomberg.

Someone at ConocoPhillips might easily think Concho's assets are overrated or the premium not worth it. Or ConocoPhilips wants to see if the premium is in line with what the market expects. Premium light or less deals can go over like a turd in a punch bowl.

Usually it's a tech or landman involved somewhat that talks. Executives, bankers and lawyers have nothing to gain and everything to lose by talking.

one MEEN Ag said:

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txaggie_08 said:

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Furlock Bones said:

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one MEEN Ag said:

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Leaks like that get out because they don't want the deal to go through, or they want to see what the market reaction is.

That's not just a banker with inside knowledge letting something slip.

---

either COP is running it up the flag pole to gauge market interest or an insider doesn't like the deal and is hoping to kill it.

---

Wouldn't a leak benefit CXO due to an increased premium? Very curious to see what happens here over the next month.

---

Its more of a process of elimination. The lawyers very rarely directly leak the info. Its not in their interest as they want the deal done to get paid, and an easy way to get fired/get disbarred. That leaves the executive teams and the bankers who are involved in the deal. Bankers just want to make a quick buck on the side, they don't tell Bloomberg about it. They tell their buddies quietly over dinner in a loud restaurant. Executive teams want to gauge market reactions or blow up deals. And executive teams tell things to Bloomberg.

Someone at ConocoPhillips might easily think Concho's assets are overrated or the premium not worth it. Or ConocoPhilips wants to see if the premium is in line with what the market expects. Premium light or less deals can go over like a turd in a punch bowl.

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this.

In my experience it's never the company guys, the lawyers, or the lead banks. It's the junior banks that get pulled in to help with financing or modeling asset sales or whatever else job they get to spread the work load around and get a piece of the pie. Those guys always spill the beans.

Yah, leads and lawyers have nothing to gain by leaking.

CrazyRichAggie said:

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jetch17 said:

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AustinAg008 said:

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Rumors swirling that COP buying CXO.

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Buying or merge?

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Is there a difference? Company A gives shareholders of Company B a bunch of money/Company A stock and then the two companies become one.

There's a huge difference to the people working at both companies and for the resulting company culture.

The culture will cease to be for Concho. Conoco is going to drive out costs and streamline.

Oh, I know. I worked at Conoco for about a decade.

All news I saw yesterday seemed to point to investors being very pleased with this COP/CXO deal. Leads me to think it definitely gets done. Question is when.

txaggie_08 said:

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All news I saw yesterday seemed to point to investors being very pleased with this COP/CXO deal. Leads me to think it definitely gets done. Question is when.

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Agree. Think the deal gets done sometime in the next 30-45 days, especially with some bullish sentiment starting to hit the oil markets.

What do we think gas inventories will look like today?

AustinAg008 said:

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txaggie_08 said:

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All news I saw yesterday seemed to point to investors being very pleased with this COP/CXO deal. Leads me to think it definitely gets done. Question is when.

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Agree. Think the deal gets done sometime in the next 30-45 days, especially with some bullish sentiment starting to hit the oil markets.

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What do you think is driving the current bullish sentiment? I was expecting sentiment to turn bearish with offshore activity resuming post-hurricane.

BCG Disciple said:

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What do we think gas inventories will look like today?

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No opinion on the single weeks inventory numbers, but reading a lot of bullish pieces on gas. It is pretty much a given now (see things like Diamondbacks report) that oil will not recover materially for a while, so gas won't be hindered by all of the associated gas from the Permian. The banks will hopefully keep people like eqt and Cabot in check.

Not sure if it's significant, but Bloomberg's reporting of COP/CXO on Friday changed from a deal possibly being done in the next few weeks to perhaps an announcement coming as soon as tomorrow.

Quote:

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The companies are finalizing the terms of a transaction and could announce an agreement as soon as Monday, said the people, who asked not to be identified discussing confidential information. No deal has been reached and talks may still fall apart.

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https://www.google.com/amp/s/www.bloomberg.com/amp/news/articles/2020-10-16/conoco-said-to-near-concho-purchase-in-year-s-biggest-oil-deal

txaggie_08 said:

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Not sure if it's significant, but Bloomberg's reporting of COP/CXO on Friday changed from a deal possibly being done in the next few weeks to perhaps an announcement coming as soon as tomorrow.

Quote:

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The companies are finalizing the terms of a transaction and could announce an agreement as soon as Monday, said the people, who asked not to be identified discussing confidential information. No deal has been reached and talks may still fall apart.

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https://www.google.com/amp/s/www.bloomberg.com/amp/news/articles/2020-10-16/conoco-said-to-near-concho-purchase-in-year-s-biggest-oil-deal

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My guess is it goes down tonight or first thing tomorrow.

There it is
http://www.rbcrichardsonbarr.com/IndustryResearch/News.aspx?a=news&ticker=a&w=&story=202010bwire19005364r1.xml

Not sure if COP is planning on relocating everyone to Houston or keeping Midland as Permian HQ, but if they decide to leave then RIP Midland.

Sentiment seems to be they'll keep the offices with the new commitment to the Permian Basin. But, obviously too soon to know for sure.

They will keep forward workforce there for a period of time. All functions will be assumed into the Houston/Bville ecosystem.

Imagine this likely turns the page on valuations for independents once CXO basically admitted the proposed business model does not work as justification for transaction.

Looking your way Parsley, Diamondback, Pioneer and EOG. The others need to be bought at PDP

Concho CEO is going to be COP L48 President and will have offices in Houston and Midland

RABAg04 said:

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Concho CEO is going to be COP L48 President and will have offices in Houston and Midland

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Yeah, due to Leach staying on board I imagine the midland offices will not be going anywhere.

Cyp0111 said:

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They will keep forward workforce there for a period of time. All functions will be assumed into the Houston/Bville ecosystem.

Imagine this likely turns the page on valuations for independents once CXO basically admitted the proposed business model does not work as justification for transaction.

Looking your way Parsley, Diamondback, Pioneer and EOG. The others need to be bought at PDP

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The leveraged pure-play, oily names are going to require consolidation to be viable again at some point in the future. Thoughts on the pure play gassy names in Marcellus/Haynesville/other gassy basins?

I like nat gas in the near/mid term. Ive been researching better ways to get exposure than go through poor mgmt teams. I prefer Haynesville solely due to realized prices.

Imagine this is a service agreement for 1 year. Again, they will keep an office but it's going to be drastically different and much scaled down.

Cyp0111 said:

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They will keep forward workforce there for a period of time. All functions will be assumed into the Houston/Bville ecosystem.

Imagine this likely turns the page on valuations for independents once CXO basically admitted the proposed business model does not work as justification for transaction.

Looking your way Parsley, Diamondback, Pioneer and EOG. The others need to be bought at PDP

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Leach cited a 40% base decline as a big rationale for doing the deal. Too difficult to make dividends at that base decline rate. Curious if Concho ever truly disclosed that decline rate in prior materials? Doubt it!

Gig-Em2003 said:

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Cyp0111 said:

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They will keep forward workforce there for a period of time. All functions will be assumed into the Houston/Bville ecosystem.

Imagine this likely turns the page on valuations for independents once CXO basically admitted the proposed business model does not work as justification for transaction.

Looking your way Parsley, Diamondback, Pioneer and EOG. The others need to be bought at PDP

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Leach cited a 40% base decline as a big rationale for doing the deal. Too difficult to make dividends at that base decline rate. Curious if Concho ever truly disclosed that decline rate in prior materials? Doubt it!

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The shale model cannot work without a constant reinvestment of capital, especially the oil shales. Look for more companies to admit this moving forward. The Delaware/Permian was always a house of cards, and the constant pumping of "1,000 benches drillable at 20 foot spacing" was pretty irresponsible.

I would guess PE gets swallowed next by either PXD or FANG.