Subscribe to Blog ContentIt has been ten years since Exxon merged with Mobil. The oil company has announced its plan to purchase XTO Energy Inc. for $41 billion with $10 billion of that in debt. XTO of Fort Worth, TX is a leader in unconventional resources with its resource base of 45 trillion cubic feet of natural gas, shale gas, shale oil, coal bed methane and tight gas. The acquisition will make Exxon one of the leaders in the natural gas market.
Exxon says it expects to see its earnings go down, but only for a short time. Exxon's Chief Executive Rex Tillerson says this move will have a long-term value to the company and will see a 10 percent increase in its resources. Exxon expects the demand for natural gas will grow and surpass coal and oil in the near-term even though the Department of Energy believes natural gas demand will drop and then climb back up a little.
If the government enacts a law to cap on carbon dioxide emissions, Exxon foresees that coal power plants will be costly compared to natural gas, which it views as the most economical way to produce mass amounts of power.
XTO has drills in Barnett Shale in Texas, Bakken Shale in North Dakota and Marcellus Shale in Pennsylvania, New York and West Virginia.
The deal awaits XTO stockholder approval and regulatory clearance.
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