EnQuest wants to buy BP's North Sea assets. The CEO said this on CNBC. He used his mouth to form words about acquiring oil fields in cold water that stopped being profitable sometime during the Obama administration.
BP is selling because extracting oil from the bottom of the North Sea costs more than just buying it from countries that have sand instead of fjords. EnQuest is interested because they specialize in buying shit nobody else wants. This is their entire business model. They are the Spirit Airlines of oil companies.
The CEO's name is Amjad Bseisu and he went on financial television to announce his company would like to purchase assets. Groundbreaking stuff. Really moved the needle. Retail traders everywhere immediately opened their brokerage apps to buy shares of a company they cannot spell and will not remember by Wednesday.
The North Sea produces about two million barrels per day now. It produced four million in 1999. The math here is not complicated. BP looked at the decline curve and decided to let someone else hold the bag. EnQuest looked at the same curve and said yes please we would love that bag.
This is called consolidation. When big companies dump their dying assets onto smaller companies who then slowly bleed out over a decade. Very efficient. The CEO told CNBC this was a great opportunity. He said this with a straight face. CNBC aired it without laughing.
Your technical analysis will not help you here. Your pivot points and your Fibonacci retracements and your MACD crossovers cannot predict which oil company will successfully acquire which underwater graveyard. But you'll draw the lines anyway because you spent forty dollars on TradingView and you need to feel like it mattered.
Photo by on Unsplash
Leave a Comment