Are Companies That Have Done Acquisitions Outperforming?

In the last two parts of this series, we have seen that some upstream companies, namely Range Resources (RRC), EOG Resources (EOG), and Occidental Petroleum (OXY), have taken advantage of lower crude oil (USO) and natural gas (UNG) prices through acquisitions. In this part, we’ll see if these companies are outperforming Chesapeake Energy (CHK), Southwestern Energy (SWN), and Denbury Resources (DNR), which sold their assets to reinforce their balance sheets.

Since 2014, as shown in the above chart, EOG Resources has risen ~19%, whereas Occidental Petroleum and Range Resources have fallen ~14% and ~55%, respectively. In comparison, Chesapeake Energy, Southwestern Energy (SWN), and Denbury Resources (DNR) have fallen ~73%, ~70%, and ~80%. Whereas EOG, OXY, and RRC have clearly outperformed and bounced back close to their 2014 highs, peers that sold assets are still treading water. In the next part, we’ll look at Wall Street analysts’ recommendations for these companies.