An ExxonMobil Corp. subsidiary's $1.69 billion acquisition of two private companies with Marcellus shale assets deepens the major's commitment to unconventional resource development.
The deal to acquire Phillips Resources Inc., Warrendale, Pa., and its natural gas exploration affiliate, TWP Inc., more than doubles ExxonMobil's Marcellus shale position in the increasingly active northern Appalachian basin.
Phillips Resources and TWP have a combined 317,000 net acres in the Marcellus in southwestern Pennsylvania. Their combined yearend 2010 proved reserves were 228 bcf of gas, and they currently produce about 50 MMcfd net of gas.
Phillips Resources owns or operates more than 4,000 producing gas wells in Pennsylvania, according to its web site. To date, the company has operated or participated in the drilling of more than 50 Marcellus shale wells, both vertical and horizontal.
ExxonMobil subsidiary XTO Energy Inc., Fort Worth, will manage the newly acquired properties from its Appalachian division based in western Pennsylvania.
The XTO acquisition in 2010, an all-stock deal valued at the time it was announced at $41 billion, represented a major commitment by ExxonMobil to unconventional oil and gas development (OGJ, Dec. 21, 2009, p. 31).
With XTO, ExxonMobil added 60 tcf of gas equivalent to its resource base, more than 2.9 bcfd of gas equivalent production, and 5 million net acres to its leasehold.
The XTO acquisition included properties in the Haynesville-Bossier, Barnett, Fayetteville, Woodford, and Marcellus shale gas plays; the Bakken shale oil play and several Permian basin fields; the San Juan basin and other Rocky Mountain coalbed methane plays; and the Freestone trend of East Texas and other tight gas properties.
Separately from the XTO acquisition, ExxonMobil last year acquired 36,000 net acres in the Horn River basin shale gas play in Canada and 67,000 net acres in the Haynesville-Bossier play.
The merger includes about 200 Phillips companies employees. It is ExxonMobil's intent to retain them as employees, Jeff Neu, XTO Energy public and government affairs advisor, told OGJ.
Neu said, "We believe the mergers will create significant value by leveraging the regional synergies in upstream operations and acreage holdings between XTO Energy Inc. and the Phillips companies."
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