Encore Eyes the Exit

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Drat! Just as I start getting to know the Encore Acquisition (NYSE: EAC) story, the company goes and puts itself up for sale. Well, it's premature to say how this story will end, but let's take a closer look at the exiting (and exciting) energy player.

Encore, as the name implies, was a follow-up to the past successes of industry veteran Jon Brumley. Brumley discovered the merits of the "acquire and exploit" model at Southland Royalty, where he rose from administrative assistant to CEO. After selling that company to Burlington Northern Santa Fe (NYSE: BNI), Brumley co-founded Cross Timbers, the predecessor to XTO Energy (NYSE: XTO). XTO follows the same model to magnificent effect.

After guiding Boone Pickens' Mesa Petroleum through a merger that created percolating Pioneer Natural Resources (NYSE: PXD), Brumley created Encore along with his son, Jonny. Over the past decade, the firm has distinguished itself as a savvy Rockies player, adept at both horizontal drilling and enhanced recovery from large old fields. The company also has some high-potential Gulf plays such as the Tuscaloosa Marine shale and the Haynesville shale, where folks like Chesapeake Energy (NYSE: CHK) and Petrohawk Energy (NYSE: HK) are fuelling a full-on staking rush.

The timing of the strategic alternatives search is a bit curious here, given that Encore just unveiled its Tuscaloosa play to the world. Then again, the company has always preferred to deal with proven assets rather than break open new frontiers. The higher-risk activity may simply be more suitable for a different party. Encore has shown its hand -- let's see who comes to the table.

Related Foolishness:

• Encore isn't the only oil patch player making major moves to unlock value.
• Here's some more dirt on the Haynesville play.
• XTO's showing no sign of exhaustion.