Just clicked on news seen the stock at 10.24, read this article, looked at the price again and it jumped to 10.45...Interesting paragraph in Bold.
Private Equity Goes Bargain Hunting for Natural Gas Assets
By Ryan Dezember
Natural gas prices that have hovered near decade lows are lifting U.S. oil and gas deal making.
The low prices have put pressure on producers to sell assets to cover budget shortfalls and to raise cash to fund increased oil drilling, which is more lucrative. Private-equity has rushed into the fire sale.
The first quarter saw private-equity oil-and-gas deals reach their highest level in at least 20 years, with more than $11.5 billion in transactions, according to a PricewaterhouseCoopers tally. In all, there were $34 billion in U.S. oil and gas deals, about even with same period a year, the firm says.
“The 10-year low natural gas prices have attracted PE as they see opportunity getting in at the bottom and are taking a long-term view of natural gas pricing,” says Rick Roberge, a principal of PricewaterhouseCoopers energy M&A business. “Corporates, meanwhile, cannot justify the investment in natural gas plays at these prices.”
If energy producers’ first-quarter earnings calls this week are any indication, private-equity firms will have plenty of oil-and-gas assets to choose from should they continue their shopping spree.
Exco Resources told investors it has a private-equity partner lined up for a joint-venture that will own its conventional gas assets. Analysts with Baird Equity Research think Exco could reap up to $300 million in that deal to go along with the $700 million or so the Dallas producer should see from the sale of its stake in the TGGT gas gathering system in east Texas and Louisiana.
Investors should also expect to hear soon about the buyers for some of Rex Energy’s so-called midstream assets (read pipelines) as well as some of the State College, Penn., company’s drilling fields in the Niobrara shale. Suntrust Robinson Humphrey analysts see these assets returning about $100 million, which will likely be used to pay down debt and fund drilling.
Ultra Petroleum executives wouldn’t specify a target date to sell the Houston company’s Pinedale natural gas liquids gathering system in Wyoming. They did suggest it will bring in about $200 million, though.
Comstock Resources and Forest Oil are both looking for partners to help them develop properties in the Eagle Ford Shale in south Texas. Baird analysts think there’s a “high probability” someone will bite on Forest’s offer. Meanwhile, they believe Comstock’s properties will “catch notable interest” because of their “enviable position” within the Eagle Ford’s oil-producing area.
North of the Eagle Ford, in Oklahoma’s Granite Wash basin, Penn Virginia has launched the sales process for its fields, aiming to bridge a budget gap with the proceeds. Jefferies analysts think the Radnor, Penn. company’s fields there and in the surrounding region could sell for about $140 million.
Of course, all of these potential deals pale in size to those Chesapeake Energy has planned, however. The Oklahoma producer has outlined a plan to raise between $9 billion and $11.5 billion through assets sales and other deals before the end of the year. About $2.6 billion worth of deals have already been made, including a $250 million tie up with private-equity giant KKR.
