Cramer: Digging Under the Whiting-Kodiak Tie-Up
NEW YORK ( Real Money ) -- Did Whiting Petroleum
Exactly a year ago, with Kodiak stock at $8 and change, this company tried to sell itself. Presumably, Whiting, one of the largest independent producers in the state, most likely took a look and passed on it.
Since then, there's been a real acceleration in finds in the Bakken as the state has become the second-largest oil producer in the country. Whiting, with this deal, should surpass the production of current Bakken champ, Continental Resources
The take-out, at these prices, amounts to a take-under as word spreads that Kodiak is once again for sale and we begin to get those increased production numbers -- ones that most people have chronically believed to have been impossible. Still, this deal transforms Whiting into a much better-known and, hopefully, less volatile and less thinly traded security.
Here's what I find most intriguing, though: If you had asked me, going into this session, which oil company was most likely to be acquired next, the answer would have been Whiting. At $9 billion in market capitalization, it is certainly swallow-able, and several companies have made it pretty clear that they wish they had more American exposure. That's especially true for Statoil
Could the much-overlooked Kodiak be the poison pill Whiting had been looking for?
To me this deal smacks more like Hillshire
It sure wouldn't shock me to learn that Whiting had been in contact with a buyer, too, and that Kodiak is simply its Pinnacle in the patch.
Kodiak's not the only acquisition news today. We also have the long-awaited consolidation in the engineering-and-construction business as the activist-pressured URS