XTO Energy Inc., a subsidiary of ExxonMobil Corp., has agreed to acquire 26,000 acres, mostly in the Midland basin, from Linn Energy LLC in exchange for a portion of XTO’s interest in the Hugoton gas field in Kansas and Oklahoma, effective June 1. The transaction is expected to close in the third quarter.
XTO will receive 25,000 net acres in the northern Midland core area that is most prospective for horizontal Wolfcamp and Spraberry development, with current production of 2,000 boe/d. The company also will receive 1,000 net acres in the New Mexico Delaware basin, expanding its existing leasehold and near-term development.
“With this agreement and our previously announced transaction with Endeavor Energy Resources, we will increase our operated position in the Midland basin Wolfcamp core to roughly 100,000 net acres and our total position in the basin to 300,000 net acres,” said XTO Pres. Randy Cleveland.
The company’s leasehold position in the Permian basin will expand to more than 1.5 million acres and more than 90,000 boe/d in net production.
“This transaction continues XTO’s growth in a key liquids play,” Cleveland added.
The Hugoton acreage acquired by Linn has current production of about 85 MMcfd of gas equivalent, 80% of which is gas.
Total reserves are estimated at 700 bcfe, 80% of which is gas. The field is comprised of more than 500,000 net acres and has 2,300 operated wells. Linn said it has identified more than 400 future drilling locations, doubling the company’s inventory in Hugoton.
Linn Chairman, Pres., and Chief Executive Officer Mark E. Ellis said that after the closing of this transaction, Linn will have remaining production of 15,000 boe/d and 30,000 net acres in the Midland basin that is prospective for horizontal Wolfcamp drilling.