On Monday, Apache
Well, today, Apache made a more conventional move. The company joined the deepwater party by picking up Mariner Energy
Sure, Mariner also has Gulf of Mexico shelf assets, as well as a position in the Permian Basin that's a bit larger than what Arena Resources brought to the table in its $1.6 billion merger with SandRidge Energy
Mariner's deepwater reserves are modest at 27 million barrels, but Apache points to unbooked potential of 1.47 billion barrels. That's the game right there -- unlocking this vast resource potential through the drill bit. That takes a lot of money, which Apache is in a much better position to provide than a standalone Mariner. The latter company was punching far above its weight with a portfolio of 36 deepwater projects. That puts the company fourth, just behind Anadarko Petroleum
The deepwater is a big boy's game. Even Devon found itself in too deep and passed the majority of its portfolio to BP
As for the price tag, the big premium has come as a surprise to some. Not the analysts at JPMorgan Chase, however. That company absolutely nailed it with its work on Mariner, moving its price target to $27 earlier this year, when shares traded hands at just $15. Don't sleep on these guys. I think they're the best on the Street when it comes to the independent exploration and production companies.
Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his Motley Fool CAPS profile or follow his articles using Twitter or RSS. The Motley Fool has a disclosure policy.