Energy Producers Rise After Petrohawk $12 Billion Takeover
Range Resources Corp. (RRC) rose 12 percent to lead the biggest rally among U.S. oil and gas producers in six months after BHP Billiton Ltd. (BHP) agreed to buy Petrohawk Energy Corp. (HK) for $12.1 billion in cash, a 61 percent premium to the stock price.
Range gained $6.68 to $61.78 at 4:10 p.m. in New York Stock Exchange composite trading.
“There’s a new high-water mark being set for the people, process and assets of tight oil and tight gas production,” David M. Heikkinen, a Houston-based analyst for Tudor Pickering Holt & Co., said today in an interview. “That’s the catalyst.”
Range, based in Fort Worth, Texas, is similar to Petrohawk, with lots of acreage in shale plays and few barriers to a sale, such as joint ventures, said Leo Mariani, an analyst with RBC Capital Markets LLC in Austin, Texas.
“There’s a tremendous amount of running room here,” said Mariani, who rates Range’s shares at “outperform” and owns none. “They’ve got thousands of wells left to drill on their position.”
Buying all onshore gas producers on the BHP purchase is a “flawed strategy,” Heikkinen said.
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