The Concho–RSP Permian Announcement: How the Market Reacted



Stock movements following CXO-RSPP announcement

Following the announcement of Concho Resources’ (CXO) decision to acquire RSP Permian (RSPP) on March 28, 2018, CXO stock fell 8.8% that same day, and RSP Permian (RSPP) stock rose 16%.

The reason for the decline in CXO stock could be the 29% premium CXO will be paying for RSPP shares and the hefty Permian price tag (read Part 1). However, as the market took in the news and saw the operational synergies CXO expects to see from the combination, the stock rose 5% the next day.

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The stocks year-over-year

On a year-over-year basis, CXO stock has risen 16.4%, while RSPP stock has risen 14%. Both CXO and RSPP have overperformed the broader energy sector benchmark, the Energy Select Sector SPDR ETF (XLE), which has fallen 4% year-over-year. The S&P 500 SPDR ETF (SPY) has risen 11.7% in the same period.

For the latest on the Permian Basin, be sure to read Permian Still Integral to US Crude Oil Production Story.


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