Exxon Mobil to buy XTO Energy
December 14, 2009
Reuters reports that Exxon Mobil Corp will buy XTO Energy Inc for about $30 billion in stock. With the buy, Exxon 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. The bid spurred expectation of a wave of consolidation in the energy industry as cash-rich companies such as Exxon move to snap up smaller players with attractive assets. The deal, which is subject to XTO shareholder approval, would be Exxon''s biggest since it purchased Mobil Corp in 1999, and the eighth largest ever in the energy and power sector. The deal is valued at $41 billion, including about $10 billion in XTO debt. XTO, based in Fort Worth, Texas, is one of the leading developers of unconventional resources including shale oil and gas or gas trapped in sands with low permeability that require advanced drilling techniques to recover. These resources have emerged as a potentially huge new resource play in North America, and their development has so far been dominated by independent U.S. exploration and production companies. But now, big oil companies like Exxon are starting to look for reserves around the world.