Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Encore Eyes the Exit

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:

Chesapeake is an Inside Value pick. Exploit the free 30-day trial offered for any of our Foolish newsletters.

Fool contributor Toby Shute doesn't have a position in any company mentioned. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 651432, ~/Articles/ArticleHandler.aspx, 10/23/2016 10:35:27 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

3/9/2010 4:02 PM
EAC.DL2 $51.65 Down +0.00 +0.00%
Encore Acquisition… CAPS Rating: ***
BNI.DL $100.21 Down +0.00 +0.00%
Burlington Norther… CAPS Rating: *****
CHK $6.68 Down -0.23 -3.33%
Chesapeake Energy CAPS Rating: ***
PXD $187.00 Down -2.38 -1.26%
Pioneer Natural Re… CAPS Rating: **
XTO.DL $41.81 Down +0.00 +0.00%
XTO Energy, Inc. CAPS Rating: *****