Rosetta is a game changer. I have been waiting for real consolidation among the shale drillers, and here we go, with Noble (NBL) buying Rosetta Resources (ROSE) for a couple of billion and a beautiful $6 premium to where the stock stood Friday.
This deal involves Noble getting prime acreage in three key areas -- the Delaware Basin, the Permian and Eagle Ford. Ironically, these holdings are very close to where Pioneer (PXD) and EOG (EOG) have acreage. It's ironic because they were the companies targeted by hedge fund manager David Einhorn as shorts -- the Mother Fracker and the Father Fracker, respectively.
This buy is a bargain, I think, for Noble given that Rosetta is down dramatically from where it was when oil was higher. Rosetta is a high-quality company with tremendous assets where Noble needs them most.
Noble is regarded as a very forward company with a very wise long-term outlook. Look for more deals now that this one has finally opened the floodgates.
We own EOG for ActionAlertsPlus.com and I do not expect it to be an acquirer or a seller. This company is the fastest-growing big independent. It doesn't need a thing. But I can see plenty of others merging, especially the fringe players.
Watch Sanchez (SN), that's the one people think could most likely be acquired; it could use help. I also think Carrizo (CRZO) could be in the crosshairs of an acquirer, although I sure hope not because CEO Chip Johnson has done such a remarkable job growing that company.
