>> Thanks for dropping by and your comments. There could very well be upside to this, especially with the purchase of Plains (and as you mentioned, BHP has done decently enough). Only time will tell, but I was certainly disappointed by this move. If I wanted (another) oil drilling company in this portfolio (I already have Transocean), I would have picked something else. :-) <<Not defiending the PXP-FCX deal here, which I agree, smells fishy. Week-old-washed-up-on-the-beach-fishy.But I do need to comment on the comparison above. Transocean is a contract deepwater drilling company. Plains is an operator. Very different businesses, and they cannot be easily compared. Both companies will have some stock price correlation to oil prices, but there are nuances. PXP will correlate nearly linearly to oil prices - as WTI fluctuates, so to does the value of the barrels they sell. Transocean, on the other hand will have a much weaker correlation at high oil prices. As long as oil is above a threshold value, operators will keep drilling, and Transocean contracts will be plentiful. If oil prices are to decline precipitously, then operators will suddenly stop drilling, Transocean will see contracts dry up, and their value can fall steeply, and much more so than operators since operators, obviously, have some continuing cash flow even at very low oil prices.Futhermore, it does bear mentioning that PXP recently closed a deal to buy significant BP deepwater GOM assets for $5.5 billion - a very good value. With proper development, PV of these assets could be as much as $10B, and the FCX cash will help with development. So I don't think the Plains acquisition was bad, necessarily. The MMR acquisition is a different story...Brian
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