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Icahn, Elliott Associates and Other Investors Drill for Oil and Gas Deals

Stocks in this article: HESRIGCHKSD

Speculation that Transocean could increase capital to shareholders began this month after the company admitted criminal charges for its role in a 2010 oil spill in the Gulf of Mexico and agreed to pay out $1.4 billion in fines to settle claims with the Department of Justice.

With criminal litigation in the rear-view mirror and a fine in line with Transocean's provisions, some speculated the company would be free to boost its dividend, an analysis seemingly confirmed by Icahn's investment.

Icahn has had a busy 12 months in the oil and gas space, highlighted by an activist stake in embattled driller Chesapeake Energy (CHK), which has netted billions in asset sales and a revamping of the company's board.

Sandridge Energy (SD), another noteworthy energy sector activist play, is currently battling hedge funds Mount Kellett Capital Management and TPG-Axon Capital Management over whether CEO Tom Ward should be fired.

All told, there's a cloudy outlook for the oil and gas industry.

Many drillers have spent wildly to gain access to highly valued shale assets, but may be stretched financially as drilling programs kick into gear. Meanwhile, gas-focused drillers still face uncertain commodity prices that could make production too costly.

See TheStreet ratings for Hess and Transocean for more on the outlook for both companies.

-- Written by Antoine Gara in New York

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