ExxonMobil (XOM) and Chevron (CVX) fixed market attention on energy markets with $60 billion moves to strengthen positions in the Permian Basin and in South America, respectively. Three other leading energy stocks with attractive portfolios are near buy points, and also worthy of investor attention.
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With Chevron’s purchase of Hess (HES) and ExxonMobil’s deal for Pioneer Natural Resources (PXD), the oil industry is seeing its most intense consolidations in more than two decades.
Joseph Sykora, an analyst at Aptus Capital Advisors, wrote Monday that following the XOM and CVX deals, it is doubtful that any of the larger independents, including Diamondback Energy (FANG) or Devon Energy (DVN), “would be on the table” for acquisition.
Meanwhile, Occidental Petroleum (OXY) fell 3.6% Tuesday after news of Chevron’s deal for Hess. Hess had been discussed as a possible merger partner for Occidental.
However, it remains to be seen whether BP (BP) and Shell (SHEL) will respond to the moves by the U.S. majors.
Larger companies could still target smaller independents, Sykora said, especially “Permian-centric names.”
Energy Stocks Near Buy Points
With energy giants eying consolidation, Permian basin plays Diamondback Energy, Matador Resources (MTDR) and Permian Resources (PR) are all near buy points.
FANG stock fell 1.2% to 163.26 in Tuesday’s market action, but it’s edged up nearly 6% so far in October and is working on a fifth straight monthly advance. Diamondback Energy stock briefly topped a 168.95 buy point in an 11-month base pattern.
Meanwhile, Matador Resources gained 2.3% early Wednesday. On Tuesday, MTDR dropped 1.5%. The energy stock has formed a cup-with-handle base and is about 3% below an official 65.44 entry, according to MarketSmith.
Permian Resources edged up 1.3% Wednesday before regular trade. PR stock is trading almost even with a cup-with-handle base buy point at 15.30.
Sykora also sees energy stocks SM Energy (SM) and Callon Petroleum (CPE) as potential acquisition targets.
SM Energy edged down 1.7% Wednesday. The stock is about 3% below a cup-with-handle base entry at 43.32.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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