Many U.S. energy companies seen ripe for picking: RRC, WLL, COG, CHK

Energy exploration companies like Range Resources (RRC-N 60.58 5.48 9.95%), Whiting Petroleum Corp. (WLL-N 58.37 2.87 5.17%) and Cabot Oil and Gas Inc. (COG-N 68.00 5.4 8.63%) have something that bigger oil companies desperately want: extensive acreage in U.S. shale basins.

Those companies and a long list of others are considered by Wall Street analysts to be takeover targets as a perfect storm for deal-making brews.

Sustained low natural gas prices have left some of the smaller companies vulnerable after they spent heavily to amass large areas to drill, while big companies are awash in cash. Crude prices around $100 US per barrel have also piqued interest in companies that own acres in oil-rich basins like the Eagle Ford and Permian in Texas.

"The large U.S. players all the way to the international companies have more cash than they know what to do with and a longer time horizon to develop the assets," said Neal Dingmann, an analyst with Suntrust Robinson Humphrey.

Mining giant BHP Billiton Plc's planned takeover of Petrohawk Energy Corp. for an eye-popping $12 billion pushed shares of potential targets sharply higher on Friday and is prompting a rush of speculation about who might be next.

"I think the key idea out there is you are looking for players that have a lead position in a basin," said Andrew Coleman, an analyst with Raymond James. "Who I think looks most interesting are Cabot and Whiting."

Cabot has acreage in the Permian Basin in Texas as well as positions in the Haynesville Shale, which straddles the Texas-Louisiana border. Whiting has acreage in the Permian and the oil-rich Bakken Shale in North Dakota.

Range Resources has substantial acreage in the Marcellus Shale in the U.S. Northeast. That basin is prized for its proximity to large natural gas consuming markets.

CHESAPEAKE SALE?

Companies that might bulk up on U.S. shale, bankers and analysts say, include ConocoPhillips, Marathon Oil Corp., Chevron Corp., Royal Dutch Shell Plc and foreign companies looking to take advantage of a weak dollar.

"Bigger companies are looking to add value," said one investment banker not authorized to speak on the record. "Shales are clearly part of their overall strategy and you've got to look at who the owners are of higher quality shale. It doesn't need to be a corporate transaction. Corporate transactions are tough to do, and there are lots of ways to capture shales."

Shares of Chesapeake Energy Corp. (CHK-N 32.25 2.04 6.75%) flew higher on Friday after news of the Petrohawk deal. But a number of analysts played down the possibility of a takeover.

Chesapeake has acreage in nearly every major U.S. shale basin, including 450,000 acres in the red-hot Eagle Ford Shale. But the company's structure is complex and it has already formed a number of joint ventures for its shale assets.

"People are saying Chesapeake and EOG Resources Inc are targets, but those companies are awfully large," said John White, an analyst at Triple Double Advisors, an energy investment management firm in Houston. "And Chesapeake is such a beast in terms of its structure, they have so many JVs, it would be quite a structural challenge."