Exxon Mobil buys unconventional natural gas producer XTO
Exxon Mobil announced today that is buying XTO in an all stock transaction valued at $41 billion. The agreement which requires shareholder approval represents a 25 percent premium for XTO shareholders and includes $10 billion of existing XTO debt.
Rex Tillerson, Exxon Mobil’s CEO, quoted in the press release, describes XTO as “a leading U.S. unconventional natural gas producer, with an outstanding resource base, strong technical expertise and highly skilled employees.” Tillerson further states that ” XTO’s strengths, together with Exxon Mobil’s advanced R&D and operational capabilities, global scale and financial capacity, should enable development of additional supplies of unconventional oil and gas resources, benefiting consumers both here in the United States and around the world.”
According to XTO sources, its resource base is the equivalent of 45 trillion cubic feet of gas, including shale gas, tight gas, coal bed methane and shale oil.
Tillerson trumpets this acquisition as “good news for the United States economy and energy security” because it will provide jobs and investment in U.S. domestic natural gas supplies. The Wall Street Journal concludes that this acquistion suggests that Exxon Mobil is “pretty confident” that natural gas prices will come off their recent lows as demand, along with the economy, improves.
Photo: Shale http://www.flickr.com/photos/77047514@N00/10621943/
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Copyright 2009 - K.J.Collins
