CNBC had several interviews today discussing the future for energy in 2007, the upside for select energy stocks, and the possibility of takeovers.
I've heard speculation over a takeout of Suncor (SU) before, and Tim Guinness (manager of the Guinness Atkinson Global Energy Fund) mentions it in the first video, but it doesn't strike me as likely. How can we determine an acceptable value for Suncor's 30 years of reserves? There aren't futures that far out; thirty years of production even takes you past CERA's peak and into their fabulous 'undulating plateau'. The value a purchaser could justify for Suncor would probably be unacceptable to Suncor stockholders, and a value acceptable to Suncor shareholders would probably be unacceptable to a purchaser. So I don't see it, personally.
In the second video, the analyst highlights 6 stocks he believes have significant upside. He mentions Occidental Petroleum (OXY) as a possible takeout candidate. I was daydreaming the other day and came up with the idea that Royal Dutch Shell should do an Anadarko and purchase both OXY and Nexen (NXY), which was once Canadian Occidental. That's probably a bit more bold/big than Shell is looking for. Husky Energy might be more Shell's style. I expect ExxonMobil to jump in to, but not until a whiff of recession is in the air, and I'm thinking XOM takes out either Devon (DVN) or Anadarko (APC).
Other names mentioned are Ultra Petroleum (UPL), CNX Gas (CXG), XTO Energy (XTO), EOG, and Range Resources (RRC).
CNBC Video: Tim Guinness
CNBC Video: Oil Patch Plays 2007