Independent energy company Apache Corporation (
) on Thursday announced it would buy Mariner Energy for $2.7
billion in a cash/stock deal.
Apache said the deal would further expand its deepwater projects
in the Gulf of Mexico. Earlier this week, Apache announced it would
buy Deven Energy's (
) assets in the Gulf.
G. Steven Farris, Apache's CEO, said that "It's the right time
[to expand into the Gulf] because recent advances in seismic
technology and continued enhancements in facilities design have
reduced the risks in one of the world's most prolific oil
The deal calls for Apache to pay around $26.22 per share for
Mariner Energy, which represents a 45% premium over the company's
Wednesday closing price. Apache will also assume $1.2 billion of
Apache shares fell $3.76, or -3.5%, in premarket trading
The Bottom Line
We had removed shares of APA from our recommended list back on
Aug.4, when the stock was trading at $106.72. Shares of APA have a
dividend yield of .56%, based on last night's closing stock price
of $108.06. The stock has technical support in the $98-$100 price
area. If the shares can firm up, we see overhead resistance around
the $114 price level. We would remain on the sidelines for now.
Apache Corporation (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
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