13 thoughts on “More M&A”

  2. I’m not opposed to acquisitions (without having to authorize new shares), but at $300 million, I believe that equates to about $13/share. I challenge TPL management to justify why this acquisition will be better for shareholders than paying out a special dividend or buying back shares.

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    • Why would Glover and company buy back shares or issue a dividend when they barely own any shares themselves??

      …so much for paying out anything above that $600m cash target. They’re just going to spend it like this to keep from paying out shareholders. The buyback days feel like a distant past.

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  4. they were always going to empire build, but if they are not diluting us maybe they are somewhat listening. FTR, voted against all the board but MS. As the late OJ said, ” if the Glove(r) don’t fit you must make him quit”. Or something along those lines.

    on a brighter note we seem to be approaching the old Stifle price target of $3000. Color me surprised.

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  5. I’m sticking up for management on this one and the previous acquisition. The huge cash pile is being put to work in a common sense way that sensibly extends the core business. It’s not like they’re suddenly getting into the hotel business or buying lots of private jets.

    These are working drills with big oil companies that should tick over very nicely for a decade plus. We will see the added revenue on the balance sheet pretty soon enough.

    Share price has never been higher FFS.

    Some people bitched about the special dividends in years gone by because of the tax implications. Others groused about moving into the water business because of insurance fears.

    I like many complained about the heinous prospect of unwanted new shares to fund the empire building – which tanked the share price – and the obscene legal fees. But that looks like it’s all in the past.

    Onwards for now.

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    • Good question. If management is as savvy about these deals as they say (they said they turned down 28 other deals before they made these do as I recall), then they will better exploit the new land’s drilling potential than the two sellers. They won me over with the growth of the water biz. For now at least, I think we have to say that after the proposed dilution trainwreck strategy (initiated by the mercifully departed pocket-fillers), current management is delivering very well.

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  7. TPL should buy every core Midland and Delaware NRA they can get their hands on. You can’t lose with minerals and it requires very few people to manage. This exposes them to more Midland and gives them an entrance to the best rock in the basin (and world) in New Mexico. These deals won’t be around forever. Wish they’d started buying these assets years ago.

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  8. Correct me if I’m mistaken but Mr. Murray Stahl sits on the Strategic Acquisitions Committee, and surely, this would’ve had his approval?

    If yes, then there’s no reason for me to think this is bad. I don’t profess to know more than MS about the oil & gas industry.

    Also, as long as they used cash and not new stock, I can at least listen with an open mind.

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  9. Think about it … TPL just spent close to $500M in the span of a few months on M&A (!!). None of the material they put out shows a SINGLE IRR calculation on these deals, payback period, or expected valuation at the time of purchase. Heck, they don’t even tell us who the seller was in this latest transaction. Would be nice to know hurdle rates for deals as well .

    Management should show its investors how these deals make sense, and how they compare then vs. repurchasing shares. I guess our cash balance now is like $150M or so right?

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    • I generally agree on wanting to see more disclosure, though for a 20bln enterprise, 300m is mice nuts – or in sec parlance, immaterial. However, communication is free and it would be nice to understand the calculus behind this deal….that said, while Glover has an undistinguished capital allocation track record and owns virtually zero shares, Murray’s presence gives me lots of comfort that these deals add to the business value above/beyond current.
      fun to be at 3k/1k!

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