This Week in Energy: Kinder Morgan, Exxon Mobil and Others

M&A Deals Alive and Well in the Energy Industry

After an unusually long period of quiet, it seems that the energy M&A market is kicking into higher gear. Three major energy companies announced M&A deals this week, with the largest Exxon Mobil Corporation (NYSE:XOM) making a greater than $2.2 billion bid for InterOil Corporation (USA) (NYSE:IOC) according to Reuters. Although InterOil agreed to be bought by Oil Search in June, Exxon’s bid could potentially win in the end. If Exxon acquires InterOil, the company would have a larger LNG presence in the critical Asian Pacific market.

Meanwhile, two other energy companies divested assets this week, with Kinder Morgan Inc (NYSE:KMI) agreeing to sell its 50% interest in the Parkway Pipeline for an undisclosed amount of cash and ConocoPhillips (NYSE:COP) selling its 35% interest in some offshore blocks off of West Africa for potentially $430 million. Although the sale of the assets won’t move the needle much for either companies given Kinder Morgan and ConocoPhillips’ size, the sales will help the two focus more on delivering value for shareholders. A healthier M&A market could also be considered bullish as it means more confidence in current and future crude prices.

A total of 45 investors from our database held shares of ConocoPhillips (NYSE:COP), 58 funds reported stakes in Kinder Morgan Inc (NYSE:KMI), and 60 funds were bullish on Exxon Mobil Corporation (NYSE:XOM) at the end of the first quarter.

Disclosure: none