Analysts see WPX’s ability to deal its gas assets as a positive for other E&Ps looking to divest noncore producing assets amid low commodity prices.
A news report that said the company had hired a restructuring attorney sent the price of the stock tumbling, but Chesapeake countered it had no intention of filing for bankruptcy.
Although M&A and A&D activity has been down lately, some believe change is coming.
President Barack Obama is proposing to pay for clean energy investments by placing a $10 per barrel oil fee as the industry grapples with low prices. Congressional leaders said the plan is dead on arrival.
Craig Lande, managing director at RBC Richardson Barr, says A&D will be different in 2016: capital markets are tightening, 20% of production is hedged and demand is hopelessly outmatched by supply.
Midstream assets figure heavily into deal, with Dominion calculating that $425 million in EBITDA could be moved into its midstream MLP. The merger would put Eastern and Western gas market under Dominion’s roof.