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Shares of Whiting Petroleum Drop on Acquisition Rumors

By Tyler Crowe - May 22, 2019 at 4:40PM

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Wall Street thinks the oil and gas producer should stay out of a bidding war for QEP Resources.

What happened

Shares of independent oil and gas producer Whiting Petroleum (WLL) closed down 10.7% today after news broke yesterday that it and several other parties are interested in acquiring QEP Resources (QEP).

So what

If one hostile takeover in the oil patch wasn't enough drama already, several other companies have started their own bidding war for QEP Resources. Earlier this year, activist investor Elliott Management announced it had taken a stake in QEP and intended to make an offer to buy all outstanding shares for $2 billion. According to a Bloomberg report after trading closed yesterday, Whiting, Callon Petroleum (CPE 8.37%), and asset management firm Blackstone Group (BX) have also expressed interest in QEP. And that likely will lead to a bidding war.

A silhouette of pumpjacks in a field.

Image source: Getty Images.

For reference, Callon's stock was down 5.2% today and Blackstone was down 0.24%. 

Now what

Bidding wars are rarely a good idea for a company. Even though QEP has a large position in the Bakken shale that Whiting could likely exploit with its own large presence there, having to outbid three other potential suitors could get pricey as well as distract management. Clearly Wall Street thinks Whiting would be better off standing on the sidelines of this fight and instead focusing on improving its lackluster performance

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Stocks Mentioned

Whiting Petroleum Corporation Stock Quote
Whiting Petroleum Corporation
WLL
The Blackstone Group L.P. Stock Quote
The Blackstone Group L.P.
BX
QEP Resources, Inc. Stock Quote
QEP Resources, Inc.
QEP
Callon Petroleum Company Stock Quote
Callon Petroleum Company
CPE
$58.55 (8.37%) $4.52

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