All right, I'll admit it: I'm entertained by salacious energy industry gossip. The energy world is rife with all sorts of wheelings and dealings: mergers, acquisitions, divestitures, joint ventures, and, my personal favorite, unsubstantiated buyout rumors. Sometimes it's flat-out impossible to keep track of everything that's going on, let alone take the time to separate the truth from the chaff. To that end, I've highlighted three energy stocks making smart moves to stay on top.
Chesapeake Energy (NYSE: CHK)
Chesapeake can't stay out of the news lately. By now, most everyone is aware of its recent troubles with wildcat CEO Aubrey McClendon and the shortcomings of its board. In an effort to regain some credibility, Chesapeake's board just announced it would bring an early end to its founder well participation program. The move is too-little-too-late for many investors, and the stock has taken a beating over the past week.
For those shareholders still holding on, bear in mind that the company is planning to monetize its acreage in the oil-rich Permian Basin in the near future. That play is one of the most productive U.S. oil plays right now, and the deal may go a long way in shoring up Chesapeake's cash flow shortfall.
Eni (NYSE: E)
Following in the steps ofExxonMobil, this Italian energy power has inked a deal with Russia to explore the country's offshore Arctic resources. Eni signed with the state-owned Rosneft in a deal that could ultimately be worth $100 billion. As in the Exxon deal, Rosneft will gain access to Eni assets in other places, such as Africa, America, and Europe.
Many Fools think companies like Eni and Exxon are foolish (small f) to sign deals with Russia, given the country's past behavior. It's a fair point, but Big Oil is running out of options. The majors are making a big push to increase reserves, so expect more deals just like this one.
Halcon Resources (NYSE: HK)
Chief Executive Floyd Wilson is looking to build a patchwork quilt out of the companies he finds in the oil patch. Halcon is picking up GeoResources (Nasdaq: GEOI) for $972 million in cash and stock.
Wilson was the head of Petrohawk Energy until it was bought out by BHP Billiton last year, and he's no stranger to mergers and acquisitions. He plans to acquire additional resources in the strongest U.S. plays and then sell Halcon a few years from now. He is off to a great start so far -- GeoResources produces oil and gas in the Bakken and Eagle Ford plays. Sixty-seven percent of the company's reserves are oil.
The energy industry is one that must be monitored closely. An investor's best bet is to keep an eye on press releases and conference calls, making note of what moves companies are making and the justification CEOs give for those moves. Internet-based tools like Twitter and My Watchlist are also great ways to stay informed on company updates and analysis.