Well, the Delaware (and then Permian Midland) is the hot tamale right now and is getting more than a fair share of deal flow - WPX/RKI, Matador/Yates, Noble/Rosetta, Vanguard/LRR, etc. Noble wanted access to two of the hottest plays (Permian and Eagle Ford) and Rosetta made perfect sense. Better economics/differentials than Niobrara and better takeaway. Niobrara will pick up steam once more infrastructure is in place and that will be helped by oil prices in the 60s-70s (vs. the 50s). Some shales are more marginal than others but some companies are able to push higher IRRs out of less attractive shales (see Synergy's profit margin in Niobrara for example). Still agree that something technical is going on with the price of BCEI vs. some peers (but one could argue the same for myriad other companies - WLL, OAS, SN, (and gas cos. RRC, AR, GPOR, COG, etc.). Guess too that BCEI hedges aren't that attractive 2015-2016 so that can't help. Cramer and others see a lot of M&A in 2H 2015 (and July?) but I see less in terms of the number of actual corporate deals. Some M&A will be by companies that want to add a new play to their portfolio - whereas others could do a Whiting-Kodiak type deal and bulk up in one play. That's more the type I see BCEI involved with. The question though for a company like PDCE is whether they want to focus on Utica/Appalachia or Niobrara in their growth thesis. I never want to count on M&A to deliver a share price but BCEI seems to have more upside catalysts than down at this juncture (unless we are all missing something).
Agree (re PDCE). Encana, CRZO and BBG may not have the dry powder. Thinking something will happen between the Niobrara triumvirate (PDCE, BCEI and SYRG) and PDCE and SYRG have the balance sheet for acquisitions. APC and NBL still the region's 800 lb gorillas but both have plenty of inventory.
Seems like a technical move to me. Watching the options and short interest for July (July 20 puts). After reading Synergy transcript, am more positive on upside potential here (Niobrara) given Niobrara/Codell economic improvements. Granted Synergy has better balance sheet but BCEI is not in the red zone ie debt to equity. Take-away remains an issue. Macros are focused on Iran deal now but that seems largely priced in. Even if approved, there are major obstacles (Congress, IAEA inspections, oil production and export infrastructure, etc.). Interesting times.
I saw the 1752 July 20 puts as well as 1013 (sold) Aug 15 puts (via TD Ameritrade). Interesting action today (especially in a few cos. - BCEI, OAS, SN, etc.). Lots of factors circling like a vulture over a carcass - IEA report, Iran, Greece, China, rigs and production from Baker Hughes and EIA, etc. Demand remains robust and the supply pinch will start to pull soon.....I added to BCEI today and generally concur with Harehau and CBD comments. Stay focused.