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Icahn Boosts Stake As He Looks To Buy Permian Producer Energen

Carl Icahn has increased his stake in Permian oil producer Energen Corporation, a filing to the SEC showed on Tuesday, after Icahn and hedge fund manager Keith Meister’s Corvex Management said last month that they could consider buying Energen.

Icahn now holds 4.3 percent of Energen’s shares, up from 3.8 percent last week.

Keith Meister, who founded his own firm Corvex Management in 2010, had learned the activist trade at Icahn Enterprises, where he was vice chairman of the board and principal executive officer.

Energen is an independent oil and gas exploration and production company that operates exclusively in the Permian Basin of West Texas and New Mexico. As of July 1, 2017, the company had identified 4,116 net engineered, unrisked, potential drilling locations in the Delaware and Midland basins with an estimated 2.5 billion barrels of oil-equivalent, net, undeveloped resource potential, Energen says.

Last month, in reporting their ownership in Energen, Icahn and Meister’s Corvex Management said in a filing that “The Reporting Persons believe the Issuer’s securities are undervalued and may, subject to due diligence, have interest in joining with other parties to acquire the Issuer as part of the strategic initiatives process or otherwise.”

At that time, Icahn told CNBC that he believed Energen was probably worth $100 a share and that the Permian oil producer could be an attractive purchase for a big energy company, especially a pipeline operator.

Energen’s shares were trading at around $66 on June 26.

“We have a lot of cash around. We could buy this company,” with or without help from other investors, Icahn told CNBC in May.

Related: WTI-Brent Spread Narrows On Canada Oil Crisis

“However, I don’t presume to feel I’m the right buyer for it because there are such synergies for another company,” the billionaire investor added.

Under pressure from Corvex, Energen appointed in March two independent directors to its expanded board of directors, and promised to “promptly conduct an in-depth review, assisted by its financial advisers, of the company’s business plan, competitive positioning, and potential strategic alternatives” as part of efforts to enhance shareholder value.

By Tsvetana Paraskova for Oilprice.com

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