This Oil Stock Got Pummeled This Week, but Here's Why You Might Want to Consider Buying It
Shares of DJ Basin-focused driller Bill Barrett Corporation (NYSE: BBG) got pummeled this week, plunging more than 19% after the company announced a merger agreement and a stock sale. However, these moves will strengthen its position in the promising DJ Basin and its balance sheet, which should enable it to drill high-return wells and grow production even if oil remains low. That returns-driven growth positions it for success in the coming years, which is why oil investors might want to think about scooping up shares after this week's drubbing.
On Tuesday Bill Barrett Corporation unveiled a series of moves that sent shares tanking. The headliner was the announcement of a strategic business combination with private-equity-backed Fifth Creek Energy. Under the terms of the $649 million deal, Bill Barrett investors will exchange their stock on a 1-for-1 basis for shares of a newly formed holding company, and Fifth Creek's owner will receive 100 million shares of the new company.
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Source: Fool.com