ExxonMobil to Acquire Companies Doubling Permian Basin Resource to 6 Billion Barrels
January 17 2017 - 9:00AM
Business Wire
- Companies’ assets include 250,000 acres
in highly prolific Permian Basin
- Adds more than 3.4 billion barrels of
oil equivalent, of which 75 percent is liquids
- Upfront acquisition cost of $5.6
billion to be paid in ExxonMobil shares
Exxon Mobil Corporation (NYSE:XOM) said today it will more than
double its Permian Basin resource to 6 billion barrels of oil
equivalent through the acquisition of companies owned by the Bass
family of Fort Worth, Texas, with an estimated resource of 3.4
billion barrels of oil equivalent in New Mexico’s Delaware Basin, a
highly prolific, oil-prone section of the Permian Basin.
ExxonMobil will make an upfront payment of $5.6 billion in
ExxonMobil shares, and a series of additional contingent cash
payments totaling up to $1 billion, to be paid beginning in 2020
and ending no later than 2032 commensurate with the development of
the resource.
Darren W. Woods, ExxonMobil chairman and chief executive
officer, said the high-quality properties are a major addition to
ExxonMobil’s unconventional liquids portfolio managed by its
subsidiary, XTO Energy Inc.
“This acquisition strengthens ExxonMobil’s significant presence
in the dominant U.S. growth area for onshore oil production,” said
Woods. “This investment gives us an exceptional Delaware Basin
position in a proven multi-stacked play that can generate
attractive returns in a low-price environment.
“The highly-contiguous position will provide significant cost
advantages in developing 3.4 billion barrels of resource, of which
75 percent is liquids. By utilizing ExxonMobil’s technological
strength coupled with its unconventional development capabilities
we can drill the longest lateral wells in the Permian Basin,
reducing development costs and increasing reserve capture.”
The acquired companies, which include the operating entity
BOPCO, hold about 275,000 acres of leasehold, and production of
more than 18,000 net oil equivalent barrels per day, about 70
percent of which is liquids. This includes about 250,000 acres of
leasehold in the Permian Basin, the bulk of that in contiguous,
held-by-production units in the New Mexico Delaware Basin, with
more than 60 billion barrels of oil equivalent estimated in place.
The companies also hold producing acreage in other areas in the
United States.
ExxonMobil is producing approximately 140,000 net oil-equivalent
barrels per day across its Permian Basin leasehold.
About ExxonMobil
ExxonMobil, the largest publicly traded international oil and
gas company, uses technology and innovation to help meet the
world’s growing energy needs. ExxonMobil holds an industry-leading
inventory of resources, is the largest refiner and marketer of
petroleum products, and its chemical company is one of the largest
in the world. For more information, visit www.exxonmobil.com or
follow us on Twitter www.twitter.com/exxonmobil.
CAUTIONARY STATEMENT: Statements of future events or conditions
in this release are forward-looking statements. Actual future
results, including project plans and schedules, resource
recoveries, production rates and cost and performance efficiencies
could differ materially due to changes in market conditions
affecting the oil and gas industry or long-term oil and gas price
levels; political or regulatory developments; reservoir
performance; the outcome of future exploration and development
efforts; technical or operating factors; and other factors cited in
under the caption “Factors Affecting Future Results” on the
Investors page of our website at exxonmobil.com. Closing of the
acquisition is subject to satisfaction of conditions precedent
specified in the applicable agreement. References to resources,
oil-equivalent barrels and other quantities of oil and gas include
amounts that are not yet classified as proved reserves under SEC
definitions but that we believe will ultimately be produced and
moved into the proved reserve category.
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