I had XTO Energy on my watchlist for a while, particularly in Q1 2009. I didn't buy it because I wasn't sure if its long-term earnings prospects were predictable. Well, Exxon is a lot more sure of its prospects than I ever was:
This was a big missed opportunity for me. I briefly considered an arbitrage play, but the all-stock nature of this transaction has dissuaded me. I'd rather not take a chance on owning Exxon right now as I need room in my portfolio for other stocks. The end of the cheap oil era makes any other energy producer somewhat more desirable, regardless of the status of its business model. The energy sector bears watching. I'll keep an eye on other independent producers like Occidental Petroleum (OXY) in case the supermajors launch more surprise deals.
Exxon Mobil, the world's largest publicly traded oil and gas producer, said Monday that it had agreed to buy XTO in an all-stock deal valued at $31 billion, the biggest oil and gas deal in four years.
This was a big missed opportunity for me. I briefly considered an arbitrage play, but the all-stock nature of this transaction has dissuaded me. I'd rather not take a chance on owning Exxon right now as I need room in my portfolio for other stocks. The end of the cheap oil era makes any other energy producer somewhat more desirable, regardless of the status of its business model. The energy sector bears watching. I'll keep an eye on other independent producers like Occidental Petroleum (OXY) in case the supermajors launch more surprise deals.
