ExxonMobil announced plans on Monday to acquire rival exploration firm XTO Energy for US$41 billion, a deal giving the largest US energy producer a bigger share of domestic natural gas reserves.
The biggest US oil group said the all-stock takeover deal would “enhance ExxonMobil’s position in the development of unconventional natural gas and oil resources.”
The transaction includes the assumption of US$10 billion in XTO debt and offers shareholders a 25 percent premium to the most recent stock price.
Analysts said the deal acquiring XTO, an independent drilling firm that has become one of the largest producers of natural gas, highlights the growing importance of the cleaner-burning fuel amid concerns on greenhouse gases.
The deal “will be a taken as a major bullish signal on natural gas,” said Joe Weisenthal, analyst at the financial Web site Business Insider.
“The deal will boost Exxon’s presence in the natural gas industry at a time of low prices for the commodity,” Melly Alazraki wrote on the Daily Finance Web site.
While natural gas is a byproduct of oil wells, XTO and others have been working to recover gas trapped in wells thought to be depleted through vertical wells to pockets of trapped methane.
Rex Tillerson, ExxonMobil chairman and chief executive, said XTO’s expertise “should enable development of additional supplies of unconventional oil and gas resources, benefiting consumers both here in the US and around the world.”
The deal, one of the biggest this year, has been approved by the boards of both firms and requires XTO stockholder approval and regulatory clearance.
XTO has rights to some 45 trillion cubic feet of natural gas including shale gas, tight gas, coal bed methane and shale oil.
These will complement ExxonMobil’s holdings in the US, Canada, Germany, Poland, Hungary and Argentina, the companies said.
Company officials hope to close the deal in the second quarter of next year and then establish a new upstream organization to manage production of unconventional resources and use of new oil exploration technology.
Bob Simpson, chairman and founder of XTO, said the firm has established a resource base of energy across the US over the company’s 23 years.
“XTO has a proven ability to profitably and consistently grow production and reserves in unconventional resources,” he said.
“As the world’s leading energy company, ExxonMobil will build on our success and open new opportunities for the development of natural gas and oil resources on a global basis,” Simpson said.
EUROPEAN TARGETS: The planned Munich center would support TSMC’s European customers to design high-performance, energy-efficient chips, an executive said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said that it plans to launch a new research-and-development (R&D) center in Munich, Germany, next quarter to assist customers with chip design. TSMC Europe president Paul de Bot made the announcement during a technology symposium in Amsterdam on Tuesday, the chipmaker said. The new Munich center would be the firm’s first chip designing center in Europe, it said. The chipmaker has set up a major R&D center at its base of operations in Hsinchu and plans to create a new one in the US to provide services for major US customers,
The Ministry of Transportation and Communications yesterday said that it would redesign the written portion of the driver’s license exam to make it more rigorous. “We hope that the exam can assess drivers’ understanding of traffic rules, particularly those who take the driver’s license test for the first time. In the past, drivers only needed to cram a book of test questions to pass the written exam,” Minister of Transportation and Communications Chen Shih-kai (陳世凱) told a news conference at the Taoyuan Motor Vehicle Office. “In the future, they would not be able to pass the test unless they study traffic regulations
‘A SURVIVAL QUESTION’: US officials have been urging the opposition KMT and TPP not to block defense spending, especially the special defense budget, an official said The US plans to ramp up weapons sales to Taiwan to a level exceeding US President Donald Trump’s first term as part of an effort to deter China as it intensifies military pressure on the nation, two US officials said on condition of anonymity. If US arms sales do accelerate, it could ease worries about the extent of Trump’s commitment to Taiwan. It would also add new friction to the tense US-China relationship. The officials said they expect US approvals for weapons sales to Taiwan over the next four years to surpass those in Trump’s first term, with one of them saying
‘COMING MENACINGLY’: The CDC advised wearing a mask when visiting hospitals or long-term care centers, on public transportation and in crowded indoor venues Hospital visits for COVID-19 last week increased by 113 percent to 41,402, the Centers for Disease Control (CDC) said yesterday, as it encouraged people to wear a mask in three public settings to prevent infection. CDC Epidemic Intelligence Center Deputy Director Lee Chia-lin (李佳琳) said weekly hospital visits for COVID-19 have been increasing for seven consecutive weeks, and 102 severe COVID-19 cases and 19 deaths were confirmed last week, both the highest weekly numbers this year. CDC physician Lee Tsung-han (李宗翰) said the youngest person hospitalized due to the disease this year was reported last week, a one-month-old baby, who does not
RSS