It seems like Noble is all over the place in anticipation of commodity pricing going up in 2017. This latest purchase of W. Texas acreage had a lot of people scratching their heads. Is this a genius move or the workings of a company trying to riddle itself in too much debt to be purchased? Do you feel this purchase will mirror the Rosetta bid and lead to more layoffs ? Interesting to say the least.
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Just when I thought the Rosetta purchase was bad, here comes this one. If oil price stays weak we will drown in debt. I just hope that the CW people are of higher quality than the Rosetta one. Rosetta hired the under performing and it shows
When the average stock analyst's "long term forecast" is 1 year and the average shale well produces 50% of its total output in 1 1/2 years then the resulting high leverage and pattern drilling is not surprising.
The Dallas Fed said “The Permian transactions are approaching price multiples associated with a bubble or a Ponzi scheme......very similar to transactions we witnessed in the early ‘80s real estate bubble, the tech bubble of ‘98–‘01 ”
Fundamental economics were forgotten in those two bubbles and today fundamental science is forgotten. (Hint: These rocks are highly fractured so 30 ac spacing will be uneconomic)
History doesn't repeat but it does rhyme... Layoffs ahead
It doesn't matter who Noble buys. This company can't execute. It's just another mediocre player.
Genius move would have been to buy CW in January 2016 and pay $10 or $12 per share. Following the herd brings Noble to the party at this inflated price. You have to respect those brilliant minds oN the tenth floor. DS KF SC and GW are the worst. Although DS is fun to talk with at a party.
Of course, buy low, gut, and wait for oil's glorious return. But.... with oil seeping out of every crack in the ground in the US, Oil flowing freely around the world, will we ever see oil return to profitability?
CW has 200+ employees working on a one rig asset? Yeah, layoffs are coming. October? November?