Exxon invests heavily in Texas oil play
Exxon Mobil Corp. will add billions of barrels of oil equivalent to its Permian Basin resource by acquiring a set of companies from a wealthy Bass family of Fort Worth.It has been a curiosity to me that Exxon appeared to focus its investments outside the US in more risky plays, rather than invest in their own back yard. I think at one point Exxon actually sold some of its earlier investments in the Texas shale fields. I think this is a smart move. I am just surprised that it took so long. But Exxon is like a big aircraft carrier that takes a lot of time and space to turn around.
The acquisition would double Exxon Mobil’s resources in the Permian Basin to 6 billion barrels of oil equivalent, as well as an “exceptional Delaware Basin position in a proven multi-stacked play that can generate attractive returns in a low-price environment,” said Darren Woods, Exxon Mobil CEO, in a prepared statement.
The Irving, Texas oil company said it plans to issue $5.6 billion in shares to purchase the companies owned by the Bass family in Fort Worth, and it could start making additional incremental cash payments of $1 billion in 2020, through 2032
These firms, including the private producer BOPCO, have estimated resources of 3.4 billion barrels of of oil equivalent in the Permian Basin, a region that has drawn a flurry of land deals since last summer.