Is there any truth to the rumor that BP and Halcon are getting together?

My Mother was told that BP and Halcon are merging maybe or just knocking heads.  Has anyone else heard this?  Maybe she was told that they were willing to work together to spin ideas off of each other, or swapping land so they can have less "holes" in their acreage.  I'm not sure. 

 

She said the info came from a reliable source.  I have NO idea who that was though.

 

Thanks!

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0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on August 7, 2013 at 3:07pm

It would be practical business for them to swap leases to fill in holes in units.  That sort of thing is common. Buying them out, however, is unlikely as BP is hoarding cash at the moment.

Permalink Reply by MJ on August 7, 2013 at 3:29pm

Marcus,

Is Halcon that large of a company?  It does make sense for the two companies to swap leases to fill in units.  Do you think BP and Halcon are both here to stay in Trumbull and Mercer.  Correct me if I am wrong but did'nt you yourself offer the opinion that Halcon was going to develop so many wells and interconnecting pipelines and then put it all up for sale?  Thanks in advance for anything else you may share...

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on August 7, 2013 at 3:53pm

Halcon's stated goal is to build an oil company and then sell it.  They have made no secret of that plan.  BP is an unlikely buyer because they need all the cash they can get.  The Deepwater Horizon disaster isn't over for them.  The Economist ran a piece about supermajors and their shaky future this week.  In it the author offered a number that is jarring: $90,000,000,000 in total liability cost to BP over the life of the company.  So I don't see them buying Halcon.  Believe me, I'd love it if they did.  I'd happily take equivalent shares of BP over the long haul vs. Halcon's common stock.

Permalink Reply by Mark McGrail on August 8, 2013 at 6:48am

Marcus,

I have often wondered about this move by BP; it didn't seem to make sense unless BP intended to be the buyer of the small players. Your point about the cash position causes me to continue to wonder.

Perhaps Shell will end up with it all here in the northern Utica.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on August 8, 2013 at 7:38am

Shell is too big and too full of bureaucrats to be able to do smaller deals.  These mega companies always struggle because they aren't nimble enough to shift when the market changes.

Permalink Reply by Mark McGrail on August 8, 2013 at 8:16am

Marcus,

I agree that the megas aren't " nimble" enough.

However, what if a company such as Shell waited for the initial E&P was completed and most if not all infrastructure were in place?

Tis would guarantee feed stock for possible cracker plant.

Permalink Reply by Trapper on August 8, 2013 at 11:03am

Shell appears to be creeping along here in Lawrence County Pa. No boom yet as far as infrastructure construction is concerned. Numerous row agreements being recorded sporatically , however. Chesapeke has a well a mile from Lawrence County in Beaver County (New Galilee) that has just sat there resting since being fracked this spring. I keep waiting to see some progress , but it sure is slow coming. I know I am 2 years into a 5+5 lease with Shell and at this rate of progress , I may see another signing bonus before any royalty checks. With all the excitement about the upper devonian being wet gas , though , I think the future is bright , just slow coming. Good news about the West Pittsburgh coal fired electric plant being converted to gas. That should be a large consumer.

Permalink Reply by MJ on August 7, 2013 at 3:38pm

Did you read the Warren Tribune Chronicle last Sunday?

Permalink Reply by Joseph-Ohio on August 8, 2013 at 5:40am

Missed it.

Went there today and searched.

There was an article on the Kibler Well.

Didn't see anything about BP + Halcon.

Did you ?

Post a link to such an article if you can.

Thx.

J-O

 

Permalink Reply by Amanda on August 8, 2013 at 7:56am

What was said, MJ? 

I just checked and didn't see anything related to BP/Halcon connection.  Is that to what you were referring?

Thanks!

Permalink Reply by MJ on August 8, 2013 at 12:01pm

 

Joseph and Amanda,

I appologize,  The front page had nothing to do with this topic of discussion.  I was just excited about the overall coverage of the new wells and pipeliones going in Trumbull and surrounding counties, and was wondering if you folks had seen the Sunday front page.

Permalink Reply by Amanda on August 8, 2013 at 7:55am

Thank you for the insightful input, Marcus.  I didn't know if there was any truth to any of it.  I appreciate it.

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