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ExxonMobil to buy Bass family’s Permian assets for up to $6.6 billion

01/17/2017

ExxonMobil Corp. has agreed to acquire companies primarily focused on New Mexico’s Delaware basin from the Bass family of Fort Worth in a deal that could total $6.6 billion.

The companies, which include operating entity BOPCO LP, hold about 275,000 acres of leasehold and production of more than 18,000 net boe/d, of which 70% is liquids. The Permian basin encompasses about 250,000 acres of the total leasehold, the bulk of which is in contiguous, held-by-production units in the Delaware basin. The companies also hold producing acreage in other areas in the US.

The deal covers an estimated resource in the Delaware basin of 3.4 billion boe, of which 75% is liquids, more than doubling ExxonMobil’s Permian resource to 6 billion boe. ExxonMobil’s unconventional liquids portfolio is managed by subsidiary XTO Energy Inc., which is currently producing 140,000 net boe/d from the basin.

“By utilizing ExxonMobil’s technological strength coupled with its unconventional development capabilities we can drill the longest lateral wells in the Permian basin, reducing development costs and increasing reserve capture,” said Darren W. Woods, ExxonMobil’s newly appointed chairman and chief executive officer. He succeeded Rex Tillerson this month after his nomination for US Secretary of State (OGJ Online, Dec. 15, 2016).

ExxonMobil will make an upfront payment of $5.6 billion in ExxonMobil shares, and a series of additional contingent cash payments totaling up to $1 billion, to be paid beginning in 2020 and ending no later than 2032 commensurate with the development of the resource.

The Bass family comprises brothers Sid, Edward, Robert, and Lee, who together inherited and built on oil assets owned by uncle and Texas wildcatter Sid Richardson. Robert is founder and leader of private equity firm Oak Hill Capital Partners.

ExxonMobil’s purchase is the second announced in as many days by a US onshore producer for Permian-focused firms. Noble Energy Inc. on Jan. 16 said it has agreed to acquire Midland, Tex.-based Clayton Williams Energy Inc. for $2.7 billion in cash and stock (OGJ Online, Jan. 16, 2017).

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