Exxon’s Big Move into Shale Gas - Taking Over XTO
DECEMBER 14, 2009, 8:09 A.M. ET
Exxon Mobil Corporation and XTO Energy Inc. Announce Agreement
IRVING, Texas--(BUSINESS WIRE)--December 14, 2009--
Exxon Mobil Corporation (NYSE: XOM) and XTO Energy Inc. announced today an all-stock transaction valued at $41 billion. The agreement, which is subject to XTO stockholder approval and regulatory clearance, will enhance ExxonMobil's position in the development of unconventional natural gas and oil resources.
Under the terms of the agreement, approved by the boards of directors of both companies, ExxonMobil has agreed to issue 0.7098 common shares for each common share of XTO. This represents a 25 percent premium to XTO stockholders. The transaction value includes $10 billion of existing XTO debt and is based on the closing share prices of ExxonMobil and XTO on December 11, 2009.
"We are pleased that ExxonMobil and XTO have reached this agreement," said Rex W. Tillerson, chairman and chief executive officer of Exxon Mobil Corporation.
"XTO is a leading U.S. unconventional natural gas producer, with an outstanding resource base, strong technical expertise and highly skilled employees. XTO's strengths, together with ExxonMobil's advanced R&D and operational capabilities, global scale and financial capacity, should enable development of additional supplies of unconventional oil and gas resources, benefiting consumers both here in the United States and around the world."
Tillerson said the agreement is good news for the United States economy and energy security, as it will enhance opportunities for job creation and investment in the production of America's own clean-burning natural gas resources.
XTO's resource base is the equivalent of 45 trillion cubic feet of gas and includes shale gas, tight gas, coal bed methane and shale oil. These will complement ExxonMobil's holdings in the United States, Canada, Germany, Poland, Hungary and Argentina.
Following the transaction closing, ExxonMobil intends to establish a new upstream organization to manage global development and production of unconventional resources, enabling the rapid development and deployment of technologies and operating practices to increase production and maximize resource value. The new organization will be located in Fort Worth, Texas, in XTO's current offices.
Bob R. Simpson, chairman and founder of XTO, said that over the company's 23-year history, XTO has developed technical expertise and has assembled a substantial, high-quality and diverse resource base in producing basins across the United States.
"XTO has a proven ability to profitably and consistently grow production and reserves in unconventional resources," said Simpson. "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."
Tillerson said the agreement is part of an ongoing, disciplined evaluation of timely investment opportunities to create value for shareholders, and to help meet long-term global energy demand growth. The agreement is consistent with ExxonMobil's business model which is focused on sustainable, long-term value creation.
Completion of the transaction is expected in the second quarter of 2010. In connection with the transaction, J.P. Morgan Securities Inc. are acting as financial advisors to ExxonMobil and Barclays Capital Inc. and Jefferies & Company Inc. are acting as financial advisors to XTO.
Media Conference Call Information
ExxonMobil and XTO will be conducting a media conference call on Monday, December 14, 2009 at 9 a.m. Eastern time (8 a.m. Central).
Participant Numbers
Domestic: 866-719-0110
International: 719-325-2212
Confirmation Code: 8522824
Analyst Conference Call Information
ExxonMobil will be conducting an analyst conference call on Monday, December 14, 2009 at 11 a.m. Eastern time (10 a.m. Central) to discuss the transaction (URL will be available at www.exxonmobil.com).
The slides to be discussed during the call will be available on exxonmobil.com for viewing and download starting at 10:45 a.m. Eastern time (9:45 a.m. Central).
Audio Webcast Participation
Listen Only Numbers:
Domestic: 877-208-2391
International: 816-581-1736
Confirmation Code: 4605791
Replay telephone numbers:
888-203-1112 or 719-457-0820
Confirmation Code: 4605791
Replay available starting at 5 p.m. Eastern (4 p.m. Central), and running through December 21 at Midnight.
About ExxonMobil
ExxonMobil, the largest publicly traded international oil and gas company, uses technology and innovation to help meet the world's growing energy needs. ExxonMobil holds an industry-leading inventory of resources, is the largest refiner and marketer of petroleum products, and its chemical company is one of the largest in the world. For more information, visit www.exxonmobil.com.
About XTO
XTO is a domestic oil and natural gas producer engaged in the acquisition, exploitation and development of quality, long-lived oil and natural gas properties in the United States. Its properties are concentrated in Texas, New Mexico, North Dakota, Pennsylvania, West Virginia, Arkansas, Oklahoma, Kansas, Wyoming, Colorado, Utah, Louisiana and Montana. For more information, visit www.xtoenergy.com.
Important Information For Investors And Stockholders
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. ExxonMobil will file with the Securities and Exchange Commission ("SEC") a registration statement on Form S-4 that will include a proxy statement of XTO that also constitutes a prospectus of ExxonMobil. ExxonMobil and XTO also plan to file other documents with the SEC regarding the proposed agreement. A definitive proxy statement/prospectus will be mailed to stockholders of XTO. INVESTORS AND SECURITY HOLDERS OF XTO ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and stockholders will be able to obtain free copies of the proxy statement/prospectus and other documents containing important information about ExxonMobil and XTO, once such documents are filed with the SEC, through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by ExxonMobil will be available free of charge on ExxonMobil's internet website at www.exxonmobil.com under the tab "investors" and then under the tab "SEC Filings" or by contacting ExxonMobil's Investor Relations Department at 972-444-1156. Copies of the documents filed with the SEC by XTO will be available free of charge on XTO's internet website at www.xtoenergy.com under the tab "Investor Relations" and then under the tab "SEC Filings" or by contacting XTO's Investor Relations Department at 817-870-2800.
ExxonMobil, XTO, their respective directors and certain of their executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of XTO in connection with the proposed transaction. Information about the directors and executive officers of XTO is set forth in its proxy statement for its 2009 annual meeting of stockholders, which was filed with the SEC on April 17, 2009. Information about the directors and executive officers of ExxonMobil is set forth in its proxy statement for its 2009 annual meeting of stockholders, which was filed with the SEC on April 13, 2009. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this document relating to future plans, projections, events or conditions are forward-looking statements. Actual results could differ materially as a result of a variety of risks and uncertainties, including: the timing to consummate the proposed agreement; the risk that a condition to closing of the proposed agreement may not be satisfied; the risk that a regulatory approval that may be required for the proposed agreement is not obtained or is obtained subject to conditions that are not anticipated; ExxonMobil's ability to achieve the synergies and value creation contemplated by the proposed agreement; ExxonMobil's ability to promptly and effectively integrate XTO's businesses; and the diversion of management time on agreement-related issues. Other factors that could materially affect ExxonMobil's and XTO's actual results, including project plans, costs, timing, and capacities; capital and exploration expenditures; and share purchase levels, include: changes in long-term oil or gas prices or other market or economic conditions affecting the oil and gas industry; completion of repair projects as planned; unforeseen technical difficulties; political events or disturbances; reservoir performance; the outcome of commercial negotiations; wars and acts of terrorism or sabotage; changes in technical or operating conditions; and other factors discussed under the heading "Factors Affecting Future Results" available through the "investors" section on ExxonMobil's website, in Item 1A of ExxonMobil's 2008 Form 10-K and in Item 1A of XTO's 2008 Form 10-K. No assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of ExxonMobil or XTO. Neither ExxonMobil nor XTO assumes any duty to update these statements as of any future date. References to quantities of oil or natural gas may include amounts that ExxonMobil or XTO believe will ultimately be produced, but that are not yet classified as "proved reserves" under SEC definitions.
CONTACT: ExxonMobil
Media Relations, 972-444-1107
SOURCE: Exxon Mobil Corporation
Copyright Business Wire 2009
Order free Annual Report for Exxon Mobil Corporation
Visit http://djnweurope.ar.wilink.com/?ticker=US30231G1022 or call +44 (0)208 391 6028
Exxon Mobil Corporation and XTO Energy Inc. Announce Agreement
IRVING, Texas--(BUSINESS WIRE)--December 14, 2009--
Exxon Mobil Corporation (NYSE: XOM) and XTO Energy Inc. announced today an all-stock transaction valued at $41 billion. The agreement, which is subject to XTO stockholder approval and regulatory clearance, will enhance ExxonMobil's position in the development of unconventional natural gas and oil resources.
Under the terms of the agreement, approved by the boards of directors of both companies, ExxonMobil has agreed to issue 0.7098 common shares for each common share of XTO. This represents a 25 percent premium to XTO stockholders. The transaction value includes $10 billion of existing XTO debt and is based on the closing share prices of ExxonMobil and XTO on December 11, 2009.
"We are pleased that ExxonMobil and XTO have reached this agreement," said Rex W. Tillerson, chairman and chief executive officer of Exxon Mobil Corporation.
"XTO is a leading U.S. unconventional natural gas producer, with an outstanding resource base, strong technical expertise and highly skilled employees. XTO's strengths, together with ExxonMobil's advanced R&D and operational capabilities, global scale and financial capacity, should enable development of additional supplies of unconventional oil and gas resources, benefiting consumers both here in the United States and around the world."
Tillerson said the agreement is good news for the United States economy and energy security, as it will enhance opportunities for job creation and investment in the production of America's own clean-burning natural gas resources.
XTO's resource base is the equivalent of 45 trillion cubic feet of gas and includes shale gas, tight gas, coal bed methane and shale oil. These will complement ExxonMobil's holdings in the United States, Canada, Germany, Poland, Hungary and Argentina.
Following the transaction closing, ExxonMobil intends to establish a new upstream organization to manage global development and production of unconventional resources, enabling the rapid development and deployment of technologies and operating practices to increase production and maximize resource value. The new organization will be located in Fort Worth, Texas, in XTO's current offices.
Bob R. Simpson, chairman and founder of XTO, said that over the company's 23-year history, XTO has developed technical expertise and has assembled a substantial, high-quality and diverse resource base in producing basins across the United States.
"XTO has a proven ability to profitably and consistently grow production and reserves in unconventional resources," said Simpson. "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."
Tillerson said the agreement is part of an ongoing, disciplined evaluation of timely investment opportunities to create value for shareholders, and to help meet long-term global energy demand growth. The agreement is consistent with ExxonMobil's business model which is focused on sustainable, long-term value creation.
Completion of the transaction is expected in the second quarter of 2010. In connection with the transaction, J.P. Morgan Securities Inc. are acting as financial advisors to ExxonMobil and Barclays Capital Inc. and Jefferies & Company Inc. are acting as financial advisors to XTO.
Media Conference Call Information
ExxonMobil and XTO will be conducting a media conference call on Monday, December 14, 2009 at 9 a.m. Eastern time (8 a.m. Central).
Participant Numbers
Domestic: 866-719-0110
International: 719-325-2212
Confirmation Code: 8522824
Analyst Conference Call Information
ExxonMobil will be conducting an analyst conference call on Monday, December 14, 2009 at 11 a.m. Eastern time (10 a.m. Central) to discuss the transaction (URL will be available at www.exxonmobil.com).
The slides to be discussed during the call will be available on exxonmobil.com for viewing and download starting at 10:45 a.m. Eastern time (9:45 a.m. Central).
Audio Webcast Participation
Listen Only Numbers:
Domestic: 877-208-2391
International: 816-581-1736
Confirmation Code: 4605791
Replay telephone numbers:
888-203-1112 or 719-457-0820
Confirmation Code: 4605791
Replay available starting at 5 p.m. Eastern (4 p.m. Central), and running through December 21 at Midnight.
About ExxonMobil
ExxonMobil, the largest publicly traded international oil and gas company, uses technology and innovation to help meet the world's growing energy needs. ExxonMobil holds an industry-leading inventory of resources, is the largest refiner and marketer of petroleum products, and its chemical company is one of the largest in the world. For more information, visit www.exxonmobil.com.
About XTO
XTO is a domestic oil and natural gas producer engaged in the acquisition, exploitation and development of quality, long-lived oil and natural gas properties in the United States. Its properties are concentrated in Texas, New Mexico, North Dakota, Pennsylvania, West Virginia, Arkansas, Oklahoma, Kansas, Wyoming, Colorado, Utah, Louisiana and Montana. For more information, visit www.xtoenergy.com.
Important Information For Investors And Stockholders
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. ExxonMobil will file with the Securities and Exchange Commission ("SEC") a registration statement on Form S-4 that will include a proxy statement of XTO that also constitutes a prospectus of ExxonMobil. ExxonMobil and XTO also plan to file other documents with the SEC regarding the proposed agreement. A definitive proxy statement/prospectus will be mailed to stockholders of XTO. INVESTORS AND SECURITY HOLDERS OF XTO ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and stockholders will be able to obtain free copies of the proxy statement/prospectus and other documents containing important information about ExxonMobil and XTO, once such documents are filed with the SEC, through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by ExxonMobil will be available free of charge on ExxonMobil's internet website at www.exxonmobil.com under the tab "investors" and then under the tab "SEC Filings" or by contacting ExxonMobil's Investor Relations Department at 972-444-1156. Copies of the documents filed with the SEC by XTO will be available free of charge on XTO's internet website at www.xtoenergy.com under the tab "Investor Relations" and then under the tab "SEC Filings" or by contacting XTO's Investor Relations Department at 817-870-2800.
ExxonMobil, XTO, their respective directors and certain of their executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of XTO in connection with the proposed transaction. Information about the directors and executive officers of XTO is set forth in its proxy statement for its 2009 annual meeting of stockholders, which was filed with the SEC on April 17, 2009. Information about the directors and executive officers of ExxonMobil is set forth in its proxy statement for its 2009 annual meeting of stockholders, which was filed with the SEC on April 13, 2009. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this document relating to future plans, projections, events or conditions are forward-looking statements. Actual results could differ materially as a result of a variety of risks and uncertainties, including: the timing to consummate the proposed agreement; the risk that a condition to closing of the proposed agreement may not be satisfied; the risk that a regulatory approval that may be required for the proposed agreement is not obtained or is obtained subject to conditions that are not anticipated; ExxonMobil's ability to achieve the synergies and value creation contemplated by the proposed agreement; ExxonMobil's ability to promptly and effectively integrate XTO's businesses; and the diversion of management time on agreement-related issues. Other factors that could materially affect ExxonMobil's and XTO's actual results, including project plans, costs, timing, and capacities; capital and exploration expenditures; and share purchase levels, include: changes in long-term oil or gas prices or other market or economic conditions affecting the oil and gas industry; completion of repair projects as planned; unforeseen technical difficulties; political events or disturbances; reservoir performance; the outcome of commercial negotiations; wars and acts of terrorism or sabotage; changes in technical or operating conditions; and other factors discussed under the heading "Factors Affecting Future Results" available through the "investors" section on ExxonMobil's website, in Item 1A of ExxonMobil's 2008 Form 10-K and in Item 1A of XTO's 2008 Form 10-K. No assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of ExxonMobil or XTO. Neither ExxonMobil nor XTO assumes any duty to update these statements as of any future date. References to quantities of oil or natural gas may include amounts that ExxonMobil or XTO believe will ultimately be produced, but that are not yet classified as "proved reserves" under SEC definitions.
CONTACT: ExxonMobil
Media Relations, 972-444-1107
SOURCE: Exxon Mobil Corporation
Copyright Business Wire 2009
Order free Annual Report for Exxon Mobil Corporation
Visit http://djnweurope.ar.wilink.com/?ticker=US30231G1022 or call +44 (0)208 391 6028
Views: 249
Replies to This Discussion
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Permalink Reply by RBH on
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Didn't EOG and a couple others drill horizontals in the Smackover, and even frac'd and got nothing and plugged wells?
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Permalink Reply by Two Dogs, Pirate on -
Skip you can't always go by the pro's, I was told by some of them that 16000 pounds of pressure could not be, but it seems to be. I have heard rumors that the Sistrunk well in Sabine Parish is capable of producing 80 million per day. As for oil below the shale, I heard rumors of a lake of oil at the bottom of the Forest oil well in Sec 26-T8N-R14W in the Smackover formation. Rumors are rumors but some prove to be true like 16000 lbs.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Two Dogs. Rumors have been and will always be a part of the petroleum industry. Post some evidence to support 16000 # and a Smackover "lake" and I will look into it and publicly admit my belief once convinced. The wise approach, IMO, is to disbelieve any assertion not backed by evidence. And not to act on rumors posted on GHS without performing due diligence.
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Permalink Reply by Aubrey C. Sanders, Jr. on
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As a petroleum geologist I have never heard of oil occuring as a "lake". It just does not happen that way as far as I know.. As to the 160,000 PSI(?): From my experience as an engineering geologist and w/out benefit of making any calculations, it would seem that any such pressure would produce "self fracing" perhaps all the way to the ground surface. At any rate, i would never want to be in the parish when a drill bit penetrated the formation. Without proof, indeed rumors are just rumors. Kind of lke global warming, I suppose. Skip, I agree with your advice on this one.
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Permalink Reply by S.H.M. on
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"I am jumping up and down and squealing!!!"
--
Hey, you have an unfair advantage as the cheerleader.
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Permalink Reply by Cheerleader on
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S. H. Maines,
I am forming a pep squad!!!
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Sorry I did not see MSNBC program. I could use a good laugh.
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Permalink Reply by jffree1 on
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It appears that some are not happy with this deal:
Kendall Law Group Launches Shareholder Investigation into Acquisition of XTO Energy Inc.
December 14, 2009 12:32 PM EST
DALLAS--(BUSINESS WIRE)-- Kendall Law Group, led by a former Federal Judge and former U.S. Attorney, launched a shareholder investigation today into the proposed acquisition of XTO Energy Inc. (NYSE: XTO) by Exxon Mobil Corp.
On December 14, 2009, the companies announced that Exxon was to purchase XTO in a $41 billion all-stock transaction expected to close in the second quarter of 2010. According to the agreement, shareholders will receive 0.71 share of Exxon stock per XTO share owned. This values shares at approximately $51.71 based on the closing price of Exxon stock on December 11, 2009 and represents a 25% premium over the $41.49 closing price of XTO on that day.
Kendall Law Group's investigation concerns whether the consideration to be paid to shareholders is grossly unfair, inadequate, and substantially below the fair or inherent value of the Company and whether the directors and special committee members may have breached their fiduciary duties by not acting in the shareholders' best interests in connection with the sale process.
http://www.streetinsider.com/Press+Releases/Kendall+Law+Group+Launc...
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Permalink Reply by Les Bamburg on
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JHH, just think you should have said "ExxonMobil" in the headline. Especially given much of the company's existing expertise and uncoventional gas acreage position in the US came from the Mobil side.
ExxonMobil will not necessarily make a market for natural gas but rather this a reflection of their long term view regarding the growth in global natural gas demand, especially natural gas power generation in developing nations. In other words, the natural gas market will be there and the real challenge is to develop sufficient natural gas production to keep the global gas demand sufficiently supplied.
Expect to see similar moves by Total, ENI, Chevron, etc.
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Permalink Reply by Two Dogs, Pirate on
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Total was looking at stuff in NW Rapides Parish in the summer of 2008.
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Permalink Reply by pops Ferg on
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EXXON along with others are already exploring the potential
Ford Motor says:
Equipped with an array of upgradable technologies and a multi-function tailgate, Ford Model U can stick with you and adapt to your needs if your life changes.
Powered by the world's first supercharged hydrogen internal combustion engine, equipped with a hybrid electric transmission and pioneering green materials and processes, Model U is a vision for the future. It is Ford's model for change - exploring the benefits a vehicle provides to its users, the way it is manufactured and how it impacts the world.
It is the Model T of the 21st century. Will probably produce some in late 2010.
Ford Motor Company, in conjunction with BP, is exploring the potential for hydrogen production. BP currently produces hydrogen from natural gas, in an efficient manner., ...
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