losses

Wednesday’s blockbuster announcement that Occidental Petroleum is challenging Chevron’s definitive agreement to acquire Anadarko Petroleum with a considerably higher offer sent another shock wave across what had been mostly somnolent energy M&A and equity markets. Oxy’s $76/share bid — $11/share more than Chevron’s — valued Anadarko at a whopping 65% premium to its closing price the day before Chevron’s deal to acquire the company was unveiled on April 12. The prospective Oxy/Chevron bidding war provided some of the strongest evidence yet that investors overreacted to the fourth-quarter decline in oil prices when they drove down E&P stock prices by some 40%, as measured by the S&P’s E&P Stock Index. Why the lack of market love? Many U.S. E&Ps are doing very well, actually. In today’s blog, Nick Cacchione identifies and discusses the outstanding performers among the 44 U.S. E&Ps we track, and considers the factors that could drive profit improvement in 2019.