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Fresh M&A Bets

As you likely know, Exxoninked a deal to buy XTO Energy, in a move that thrusts the U.S. energy giant to the forefront of North America's fast-growing natural gas industry.

With the buy, Exxon, the largest publicly traded energy company, gains a major foothold in the newest energy discoveries as it bets on natural gas expanding its share of the world's largest energy market.

"This deal provides Exxon with some domestic momentum it didn't have," John Olson, a fund manager at Houston Energy Partners, said. "They are getting a huge acreage spread, with lots of shale gas plays."

The bid, announced on Monday, sparked expectations of a wave of consolidation in the energy sector as cash-rich companies such as Exxon move to snap up smaller players with attractive assets.

What’s the trade?

Jon Najarian tells the desk that the options volume in the three stocks spiked on Monday, which he interprets as speculation they could all be takeover targets. They follow:

Devon Energy
Chesapeake Energy
Plains

"But I faded Devon and Chesapeake," says Jon Najarian. "I don't think a deal gets done this year. And I think only the smaller names such as Plains get taken out in the end."


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Trader disclosure: On December 14th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Pete Najarian Owns (AAPL) Calls; Pete Najarian Owns (DELL) Calls; Pete Najarian Owns (RIMM) Call Time Spread; Pete Najarian Owns (UUP) Call Spread; Pete Najarian Owns (CLF), Is Short (CLF) Calls

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