ExxonMobil is moving on a big expansion in the Permian Basin, perhaps confirming the play’s “Narnia-like” status for oil and gas producers, where profits and growth are still possible despite lower oil prices.
The company says it will pay US$5.6 billion initially to the Bass family of Fort Worth, Texas, followed by up to US$1 billion in contingent cash payments between 2020 and 2032 based on development of the resource.
The acquisition includes companies owned by the Bass family featuring about 275,000 acres of leasehold and production of about 18,000 boe/d, 70 percent of which is liquids, says ExxonMobil, which currently produces about 140,000 net boe/d across its Permian Basin properties.
ExxonMobil CEO Darren Woods says the acquired assets are a major addition to its unconventional liquids portfolio, managed by subsidiary XTO Energy Inc.
“This acquisition strengthens ExxonMobil’s significant presence in the dominant U.S. growth area for onshore oil production,” Woods said in a statement.
“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.”