Exxon Mobil Corp. has boosted its U.S. oil and natural gas portfolio in the Permian Basin in Texas and Utica shale in Ohio. These assets are managed by the company’s subsidiary, XTO Energy Inc.
“These transactions underscore our commitment to developing high-margin liquids growth in areas such as the Permian, while also efficiently funding development of our extensive domestic natural gas resource in emerging plays such as the Utica,” said Randy Cleveland, president of XTO Energy Inc.
Through an agreement with Endeavor Energy Resources LP, XTO will fund development to gain substantial operating equity in approximately 34,000 acres in the prolific liquids-rich Wolfcamp formation in Midland and Upton counties, Texas. Endeavor will continue to operate shallow production while XTO will drill and operate horizontal wells in the deeper intervals.
The agreement increases XTO’s holdings in the Permian Basin to a little more than 1.5 million acres, enhancing the company’s significant presence in one of the major U.S. growth areas for onshore oil production.
“The Wolfcamp shale is a vast, tight oil resource with tremendous potential,” Cleveland said. “The presence of multiple, stacked pay zones creates the potential for capital-efficient horizontal development, and the proximity to XTO’s ongoing Wolfcamp operations will offer operating cost efficiencies.”
In a separate transaction involving its holdings in the Utica shale, XTO signed an agreement with American Energy – Utica LLC (AEU) following a competitive bid process. The agreement will enable AEU to earn approximately 30,000 acres of XTO’s Ohio leasehold in Harrison, Jefferson and Belmont counties. XTO will continue to operate in a core area of approximately 55,000 net acres, optimizing development by using proceeds from the transaction to fund 100 percent of near-term development costs.
“We just initiated development in the Utica and are encouraged by results from our initial well that is producing at a peak 30-day rate of about 15 million cubic feet of dry gas per day,” Cleveland said. “The agreement funds near-term development of a substantial operating position in this emerging play.”
XTO grew its production in the Appalachia region by almost 30 percent in 2013 and maintains a strong presence with about 645,000 acres in the Marcellus and Utica shale plays. The company’s portfolio has tripled in size since 2009 when the merger with ExxonMobil was announced.