No Takers for Endeavour International

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Last February independent oil & gas company Endeavour International Corp. (NYSE: END) initiated a strategic review to help it “further enhance shareholder value.” The company needed the help. Its size works against it. At the time of its announcement, the company’s market cap was just around $225 million.

The strategic review boosted the share price back over $7, but Monday’s announcement that the strategic review resulted in essentially no change has hit shareholder value in a negative way. Endeavour said its board “has determined that it is [in] the best interests of shareholders to retain and exploit its existing asset base.” To further that plan the company is closing its London offices and its executive v-p for international operations is gone.

Endeavor owns assets onshore in the U.S. and in the U.K. region of the North Sea. The company expects to begin production “imminently” at the Rochelle field which will be operated by Nexen, the former Canadian firm that was acquired by China’s Cnooc Ltd. (NYSE: CEO) earlier this year.

Cnooc is part of the consortium that is going to pay a $7 billion signing bonus to Brazil for winning the one-bid auction to develop the offshore Libra field offshore. The Chinese firm’s 10% stake in the consortium could cost it $700 million.

Of course Libra promises billions of barrels of reserves while Endeavour’s proved reserves at the end of 2012 were 47.2 million barrels of oil equivalent of which 62% is oil. Endeavour’s share price today is near $6, and with 42.6 million shares outstanding the company’s market cap is around $277 million. That prices Endeavor’s barrels at around $9.50 each. A good price, but Cnooc was not interested. Not a good sign.