US oil giant Exxon Mobil has bought two companies for US$6.6 billion that more than doubles its resources in the Permian Basin in Delaware.
The newly acquired companies are owned by the Bass family of Fort Worth, Texas, and have an estimated resource of 3.4 billion barrels of oil equivalent in the Delaware Basin.
ExxonMobil will make an upfront payment of $5.6 billion in ExxonMobil shares, and a series of additional contingent cash payments totalling up to $1 billion, to be paid beginning in 2020.
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. 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,” said Woods.
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 US.
ExxonMobil is producing approximately 140,000 net oil-equivalent barrels per day across its Permian Basin leasehold.