How to Trade Renewed Oil M&A Interest


 
 
02:19 04/14/2019

Oil M&A ground to a halt in early 2019.

All thanks to plunging oil prices on excessive global supply.  In fact, U.S. oil and gas M&A fell 93% in the first quarter of 2019 to just $1.6 billion. But that’s what happens when oil prices plummet more than 40%.  However, as oil prices begin to recover, we’re seeing a return of respectable M&A in the sector.

On Friday, for example, Chevon (CVX) announced it would buy Anadarko Petroleum (APC) in a cash and stock deal valued at $33 billion.  That values APC at $65 a share – a 37% premium to its Thursday closing price. That, by the way, is the 11thbiggest offer for an energy company.

However, we believe this is only the start.

We believe that as oil begins to recover, we could see an incredible return of M&A activity.

We believe that as oil begins to recover, we could see an incredible return of M&A activity.  One stock that's just beginning to also break higher on the news is Devon Energy DVN , which we believe could run to $40, near-term.

There are two ways to trade the DVN opportunity.

One way is to just buy the DVN stock at market prices on Monday.  The other way is to consider buying to open the DVN July 19, 2019 33 calls at market prices on Monday.




This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
Most Read