Takeover bid puts a rocket under the junior oil sector
News out on Friday, that Canadian firm Baytex had made a $4.10 per share bid for Aurora Oil & Gas (ASX: AUT), put a ROCKET under the junior oil sector.
The offer price was a substantial 56% over Aurora's last closing price -- and shows that demand for acreage in prime US shale oil and gas regions is white hot.
Aurora is involved in more than 80,000 acres in the heart of these regions, including 22,000 acres in the liquids rich zones of the Eagle Ford.
Several Australian listed companies have already received prime prices for some of their land holdings. Antares Energy (ASX: AZZ) only recently pulled out of a deal to sell its Permian Basin assets for US$300 million.
Its market cap is only just over $100 million currently. Obviously, the company believes the assets are worth more. Time will tell.
Is this the next takeover candidate?
One stock that could be next on the takeover list is Sundance Energy (ASX: SEA).
Shares in Sundance rose 10% on Friday, and with acreage in the US shale regions, may well be the next on auction block.
Sundance is a stock that we have highlighted previously in a Motley Fool Share Advisor report titled 'One small resources company that could win big'. We highlighted Sundance based on its potential production and performance -- a takeover offer for the company being the potential icing on the cake.
That said, investing in companies purely on the chance of it receiving a takeover offer is fraught with danger, and not something we recommend.
Other stocks with US oil and gas assets that could be under the microscope include AWE Limited (ASX: AWE), Red Fork Energy (ASX: RFE) and Maverick Drilling and Exploration (ASX: MAD).
SEA Price at posting:
$1.08 Sentiment: Hold Disclosure: Held
