Shares of Raging River Exploration Inc. (RRX.TO) are under pressure today after company managers appeared to pour cold water on the notion the junior oil and gas producer could be acquired.
The company issued a press release Thursday responding to market speculation that the company had hired investment bankers to help with a potential takeover of the company.
“As part of our normal business practice, Raging River has previously and will continue to engage financial advisors to assist in the execution of its long term business plan,” Chief Executive Officer Neil Roszell said in the release. “GMP Securities had been engaged as a financial advisor to Raging River as part of an ongoing process undertaken by management and the Board of Directors to explore ways to further the company's business plan.”
Raging River’s stock spiked nearly 10-per cent on Wednesday to close at $10.40 per share despite low oil prices.
Canadian Natural Resources recent $12.74-billion deal to buy Alberta oil sands assets from Royal Dutch Shell and Marathon Oil has spurred a lot of speculation about potential oil sands takeover targets, according to Andrew McCreath, BNN markets commentator and the founder of Forge First Asset Management Inc.
”Little question it’s a great company,” McCreath told BNN. “If you are bullish on oil you may want to be long but don’t [buy] it on takeout rumors.”
Raging River is a quality company and has enviable exposure to the coveted Viking play in Saskatchewan, McCreath said.
Raging River CEO Neil Roszell has a good reputation for building strong energy companies and selling them. He ran Wild Stream Exploration Inc. and Wild River Resources and sold both to Crescent Point in 2012 and 2009 respectively.