• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Energy

Who's Next in Energy Merger Frenzy?

Speculation begins, but BG doesn't look like anyone else.
By JIM CRAMER
Apr 08, 2015 | 06:19 AM EDT
Stocks quotes in this article: RDS.A, RDS.B, PBR, COP, LNG, BP, APC, DVN, COG, RRC, XOM, CVX

Before you get too caught up in the frenzy of who is next, think: does any company really LOOK like BG?

I am talking about the incredibly transformational deal in which Royal Dutch (RDS.A; RDS.B) buys BG at a 50% premium, to get worldwide reserves at what it hopes is a bargain price.

The charitable trust is a shareholder in Royal Dutch and it's been pretty miserable -- more miserable than most, because people perceive it as a high-cost operator of high-cost properties even as it has become a lower-cost operator of lower-cost properties. It just hasn't told the story right.

BG, as you will see from our note this morning, gives it lots of assets, plenty of LNG, which is going to be in demand in a huge way in Asia, and a chance to get much bigger in Brazil, as some would say it has the best assets there after the hobbled Petrobras (PBR).

The problem in the "who is next" game is that BG doesn't really look like anyone else. It's like if Conoco (COP) were to merge with Cheniere (LNG), the most aggressive natural gas liquefier, and then put itself up for sale. 

It's not BP (BP).

People will buy BP because it seems like it is always for sale since Macondo, but it has sold off so much that I don't think it will be all that attractive to people.

People will also buy Anadarko (APC), Devon (DVN), the aforementioned Conoco as well as Cabot Oil and Gas (COG) and Range Resources (RRC). These all have big natural gas holdings.

The only problem with this kind of thinking is that you are betting on Exxon (XOM) or Chevron (CVX) to do the buying. Almost no one else is big enough.

And I don't think either of those companies sees real value right now.

So, get ready for some "buy everything first and hope someone else buys everything tomorrow."

Otherwise, if you have BG, cograts. My trust's consolation prize? Royal Dutch promised the dividend for a couple of more years -- which is the principal reason why anyone owns it anyway.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long RDS.A.

TAGS: Investing | Global Equity | Energy

More from Energy

Most Investors Can't Kick About the Markets in 2019

Bret Jensen
Dec 13, 2019 9:30 AM EST

Energy and manufacturing were soft spots, but the rising tide of the indices to all-time highs lifted many boats.

Stuck in a Tough Spot, Chevron Drills Down Strategy

Timothy Collins
Dec 11, 2019 11:55 AM EST

Company takes on challenges to cut risk and raise return, and now the technical picture shows it's primed for a quick $5 to $7 move over the next few weeks.

Enphase Energy Is My 'Stock of the Week'

James "Rev Shark" DePorre
Dec 9, 2019 1:58 PM EST

ENPH has had huge, quick growth.

With Saudi Aramco IPO, Saudis Have Another, Huge Reason to Support Oil's Price

Maleeha Bengali
Dec 9, 2019 8:53 AM EST

And we could be in the middle of the perfect storm for oil markets, where prices can rise aggressively through the first quarter.

Weakness After Protracted Upside Move Causes Discomfort

James "Rev Shark" DePorre
Dec 5, 2019 10:52 AM EST

Some traders seem unsettled by a bit of downside volatility after not experiencing much of it of late.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 10:10 AM EST BOB LANG

    Banking a Big Winner in SRPT, Rolling Up

    Nov. 20 here on the CC, I mentioned buying some Ma...
  • 10:36 AM EST GARY BERMAN

    Fibocall: How High Can Crude Go?

    On crude: I am looking for higher, but please b...
  • 08:20 AM EST BOB LANG

    Webinar Time - Talkin' Calendars, Butterflys

    join me later today after the market close as we t...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2019 TheStreet, Inc., 14 Wall Street, 15th Fl, NY, NY 10005

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login