By that, I mean we were trying to decipher who might stack up as both logical acquirers and the targets. The energy industry has become more and more divided through the years. There are the major integrated companies, which operate around the world and include refineries and often marketing outlets among their wares. And there are the independents that focus on exploration and production, both domestically and internationally.
I happen to believe that its increasing volumes and relative environmental friendliness will soon have us moving in the direction of the use of far more natural gas as a fuel source than traditionally has been the case. Just in the past few years independents like Petrohawk, Range Resources, and, yes, XTO have led the way -- along with the oilfield services companies -- in developing techniques that have made it possible to extract gas from unconventional sources, such as shale formations.
Now the majors have cottoned to the idea of gas's likely growth, hence Exxon's move on XTO, and almost certainly a string of acquisitions will occur behind it. Possible buyers might include the likes of Shell, Chevron
And the Justice Department willing, Exxon itself might still not be through once it digests XTO. Even after that deal, Exxon would have more than enough treasury stock remaining to buy super-major ConocoPhillips
So don't be surprised by a procession of acquisitions of independent producers by the major oil companies. Indeed, don't even be shocked if industry leader ExxonMobil continues to head up the parade.