So ConocoPhillips has not done well on the stock market in recent times. It also did not help when Warren Buffett described his super-investment in the company as a “dumb” mistake. Conventional analysis has held ConocoPhillips’ $35.6-billion acquisition of Burlington Resources responsible for its recent woes. We are not convinced.
For example, ExxonMobil’s $41-billion acquisition of XTO Energy prices out at $15.57 per barrel of oil equivalent. In comparison, the ConocoPhillips-Burlington transaction was at $17.79 per barrel of oil equivalent, a premium of about 14%. While any premium in hindsight is too large, this is not as large as analysts make it out to be.
