Public E&Ps Weigh Merits of Private Life

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A number of US independent E&Ps are exploring taking their businesses private. Investor pressure has built over the past few years for independents to stem growth, return massive amounts of cash to shareholders and improve their environmental credentials. While many have succeeded in meeting investors at least halfway, some are not content to sit on curbed production in the current commodity price boom. Continental Resources founder and chairman Harold Hamm launched a $25.4 billion take-private offer for the company recently, citing the “freedom” privates have to operate without the limits of the public markets. Indeed, privately owned oil and gas producers, which do not face the same shareholder demands for capital discipline as their publicly traded peers, have been most responsible for driving up the US rig count over the past year. Meanwhile, billionaire Warren Buffett’s Berkshire Hathaway has increased its stake in Occidental Petroleum to over 20%, not including preferred shares and warrants, fueling speculation he may take the large Permian operator private.

Corporate Strategy , Independent E&Ps, M&A
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