Possible Bakken Buyouts: Continental Resources
Just the other day we posted an article discussing the increased merger and acquisition activity in the energy markets. Specifically those surround the shale natural gas world. Well, let’s get to predicting! Looks like there are some additional buyout possibilities in this market. According to David White, Continental Resources may be one of those companies.
In its 2008 report, the USGS estimated that there were 3 billion to 4.4 billion barrels of recoverable oil in the Bakken. Recently Continental Resources’ (CLR) CEO said there approximately 24B barrels of recoverable oil in the Bakken using current technology. Various other reports have claimed anywhere from 167B to 500B barrels of potentially recoverable oil exist in the Bakken. It is unclear what the actual end figure will be, but it seems likely that technology will eventually improve, making more and more of the oil in the Bakken recoverable. It is already clear that the 2008 USGS estimate was an underestimate. The CLR CEO’s estimate is probably accurate (or close) for the current technology. However, big oil companies tend to plan for the future. If they buy now, they may find that they are eventually able to recover several times the originally forecast amount. It’s almost like purchasing an annuity for its current worth with a huge extra trust fund thrown in free as part of the bargain. A lot of big oil companies likely find this possibility appealing.
Many of these companies facing possible buyouts have seen major down turns in the market due to the low energy prices. With companies experiences such major suffering, it peaks interest in potential business ventures for those who are still in good shape. Keep close track of these buyout candidates, they could be great options to make some cash.
Quotes taken from report by David White, Read the entire article here.
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