Exxon Mobil Corporation has moved to more than double its Permian Basin resource to 6 billion barrels of oil equivalent through the acquisition of companies owned by the Bass family of Fort Worth, Texas, with an estimated resource of 3.4 billion barrels of oil equivalent in New Mexico’s Delaware Basin, a highly prolific, oil-prone section of the Permian Basin.
ExxonMobil will make an upfront payment of US$5.6 billion in ExxonMobil shares, and a series of additional contingent cash payments totaling up to US$1 billion, to be paid beginning in 2020 and ending no later than 2032 commensurate with the development of the resource.
ExxonMobil chairman and CEO, Darren Woods, said the high-quality properties are a major addition to ExxonMobil’s unconventional liquids portfolio managed by its subsidiary, XTO Energy Inc.
“This acquisition strengthens ExxonMobil’s significant presence in the dominant U.S. growth area for onshore oil production,” said Woods. “This investment gives us an exceptional Delaware Basin position in a proven multi-stacked play that can generate attractive returns in a low-price environment.
“The highly-contiguous position will provide significant cost advantages in developing 3.4 billion barrels of resource, of which 75 percent is liquids. 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.”
The acquired companies, which include the operating entity BOPCO, hold about 275,000 acres of leasehold, and production of more than 18,000 net oil equivalent barrels per day, about 70 percent of which is liquids. This includes about 250,000 acres of leasehold in the Permian Basin, the bulk of that in contiguous, held-by-production units in the New Mexico Delaware Basin, with more than 60 billion barrels of oil equivalent estimated in place. The companies also hold producing acreage in other areas in the United States.
ExxonMobil is producing approximately 140,000 net oil-equivalent barrels per day across its Permian Basin leasehold.