Speculation has heightened that Swiss-based Weatherford International Ltd. may be next after missing earnings targets for the past three quarters. Another potential target is Oklahoma City-based Devon Energy ( DVN), which is attempting to raise cash by putting its gas gathering and processing assets into a master limited partnership. What's the reason for all this attention from activist investors? Simmons & Co. International analyst Bill Herbert wrote in a recent report that "full-throttled aggression" by shareholder activists is due to the largely uninspired results for energy companies, and the "ongoing intransigence" of the industry to more sensibly allocate capital and improve corporate governance. "What is interesting, however, is the degree to which activists have been emboldened and are now pursuing agendas with previously unassailable management teams," the report said, noting the Oil States case. "Prior exemplary track records are not deterrents if the perception is that managements are being unresponsive to seemingly legitimate shareholder agendas." New Orleans-based Global Hunter Securities LLC said activists are urging not only asset changes for capital needs or better focus to wholescale management changes. The call for replacing top executives extents from the general cause of increasing shareholder value to anger with overpaid managers, entrenched boards and old-fashioned mismanagement.
"We believe other underperformers, APA
Carl Icahn has had mixed results. While he was able to take control of Sugar Land, Texas-based refiner CVR Energy, which issued a special $6.50 per share dividend to shareholders on May 28, and got CEO Aubrey McClendon of Oklahoma City's Chesapeake booted, he only achieved a partial victory with Transocean, convincing the board to vote out chairman Michael Talbert and install one of his own nominees but failing to boost the annual dividend to $4 per share from the Swiss-based offshore driller's proposed $2.24. Even a whisper of potential activism can send an energy stock soaring, whether a big change is coming or not, given a tough energy stock market plagued by directionless crude oil prices, mixed industry fundamentals and general commodity skittishness, Houston's Tudor, Pickering, Holt & Co. Securities Inc. said. The firm cites Key Energy Services Inc., which said May 24 it was expanding its board of directors to include Mark Rosenberg, principal of MHR Fund Management LLC and Key's largest shareholder. The Houston oil service provider's stock added 10% over two days on the news. "Activists