QEP Resources' Stock Gains 5.3% on Takeover Speculations

Zacks Equity Research

QEP Resources, Inc. QEP may soon be a takeover target, per Bloomberg. The stock jumped 5.3% yesterday following the speculation. In this regard, it has reportedly attracted two exploration and production companies, namely Denver, CO-based Whiting Petroleum Corporation WLL and Houston, TX-based Callon Petroleum Company CPE. A leading investment and advisory firm, The Blackstone Group L.P. BX is also in the race.

Notably, QEP Resources received an acquisition proposal from shareholder Elliott Management Corp. earlier this year. Elliott expressed plans of taking over all outstanding shares of the upstream energy player for a consideration of $8.75 a share, which was at 44% premium to the stock’s closing price on Jan 4.

Elliott, which is still in the bidding race for QEP Resources, supports the upstream company’s move to become a pure-play Permian firm and believes that its constructive efforts are yet to be reflected in the company’s stock price. In fact, QEP Resources has allocated about 80% of 2019 capital budget for this lucrative play. The company’s daily equivalent production from this region in first-quarter 2019 increased 47% from the year-ago period to 4,082.3 thousand barrels.

Notably, Whiting Petroleum is a top-tier operator in North Dakota's Williston Basin, which is centered on the Bakken formation. However, Callon Petroleum’s operation is solely focused on the Permian Basin.

Price Performance & Zacks Rank

Denver, CO-based QEP Resources has gained 40.3% year to date compared with 11.1% collective growth recorded by the industry. Currently, it holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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The Blackstone Group L.P. (BX) : Free Stock Analysis Report
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