Exxon Mobile Purchases XTO For Billions

Exxon Mobile has made arrangements to purchase XTO Energy in a deal that includes only stock that is worth $31 billion dollars. The oil giant is trying their powers in capitalizing on the growing supply of natural gas at home. The agreement made between the two companies result in a rush to own natural gas resources by main integrated producers and may lead to the beginning of a considerable consolidation in the energy production. Exxon is indeed a trendsetter and in dealing with a company such as XTO Energy, could prompt many other major companies such as Chevron Corp. or BP BLC to move fast in purchasing natural gas. Technology recently discovered, is said to “unlock trillions of cubic feet of natural gas at home, meaning energy producers do not have to navigate tricky political environments overseas”. But, this does not mean that overseas projects will be barred.

In the past couple of weeks, Exxon has been working on a $15 billion dollar project dealing with natural gas in Papua New Guinea, in which they make efforts to offer energy to a fuel – hungry China. Exxon claims that they are moving towards landing natural gas assets in the near future. Once this contract closes, Exxon plans to create an organization that will direct global growth and the production of unconventional resources. Through this deal made, Exxon will have to pay XTO a $10 billion debt. Bob Simpson, who is the CEO of XTO Energy stated that, “XTO has a proven ability to profitably and consistently grow production and reserves in unconventional resources”. Bob Simpson is among the highest paid directors in America and last year alone, he profited over $53 million. Mr. Simpson retired in 2008 as the company’s CEO.

Source: The Associated Press

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