2010-01-07-2009-12-14-2010-06-25

Bought company with assets in Barnett, Haynesville, Fayetteville, Woodford, Marcellus and Bakken shales, the San Juan region, South TX, Gulf of Mexico and the North Sea, gaining 13.9 Tcfe proved, 2.3 Bcfe/d.

Securing a leading position in all key U.S. unconventional resource basins, international supermajor ExxonMobil Corp., Irving, Texas, (NYSE: XOM) has completed its acquisition of independent and U.S. gas-focused XTO Energy Inc., Fort Worth, Texas, (NYSE: XTO) in an all-stock transaction for approximately $41 billion. The deal was announced in December 2009.

ExxonMobil will establish a new upstream organization to manage global development and production of unconventional resources, which will retain both the name XTO Energy Inc. and current headquarters in Fort Worth, Texas. Approximately 3,000 XTO employees are transitioning to the new organization.

The company will pay 0.7098 share per XTO share, a 25% premium to XTO's closing price of $41.49 on Dec. 11, 2009, in a tax-free transaction. The transaction value also includes $10 billion of existing XTO debt.

Pro forma, ExxonMobil holds approximately 8 million unconventional acres, with approximately 60% outside of the U.S. The acquired assets comprise interests in the Barnett, Haynesville, Fayetteville, Woodford, Marcellus and Bakken shales, the San Juan region, South Texas and the Gulf Coast, offshore Gulf of Mexico and in the North Sea.

Founded in 1986, XTO is a leading U.S. unconventional gas producer with a resource base of approximately 45 trillion cubic feet of gas and proved reserves of 13.9 trillion cubic feet of equivalent. The company's production is 2.3 billion cubic feet equivalent per day (80% gas).

Previously vice president of ExxonMobil Development Co., Jack Williams has been named president of XTO Energy Inc. Keith Hutton, formerly XTO CEO, is executive vice president of the new organization.

Williams says, "With this agreement, we are combining XTO's skills, capabilities and asset base with ExxonMobil's advanced research and development and operational capabilities, global scale and financial capacity. The new organization will create the opportunity for more jobs and investment in the development and production of clean-burning natural gas both here in the United States and around the world."

Hutton adds, "ExxonMobil worked closely with XTO's management to ensure employees understand how important they are to the future success of the new organization. XTO's employees bring the ability to enhance ExxonMobil's global operations through the vast experience they have gained in innovative and efficient resource development in the United States."

ExxonMobil chairman and chief executive Rex W. Tillerson also underscored the deal's significance in helping to produce more domestic clean-burning natural gas, which will in turn deliver innovation, technology, investment and jobs.

"ExxonMobil's "Energy Outlook" indicates that gas will grow more rapidly than any other major energy source given its availability and relatively low carbon profile," Tillerson says. "We believe gas is the fuel of choice for power generation, producing fewer greenhouse gas emissions than other electrical-generation fuels, such as coal."

J.P. Morgan Securities Inc. is financial advisor to ExxonMobil. Barclays Capital Inc. and Jefferies & Co. Inc. were financial advisors to XTO, and Barclays provided a fairness opinion.

KeyBanc Capital Markets Inc. analyst Jack Aydin previously estimated that ExxonMobil would pay approximately $2.96 per proved Mcfe and $14,099 per flowing Mcfe per day.

Stephen Richardson, an analyst with Morgan Stanley & Co. Inc., valued the deal at $2.91 per Mcf on proved reserves and proved, probable and possible reserves of 45 Tcf at $0.90 per Mcfe.

Morgan Keegan Equity Research analyst Chris Pikul also estimated the deal metrics at $2.80 per Mcfe using a year-end 2009 reserve forecast of 14.3 Tcfe. Additionally, he estimated the deal's 3P valuation at $0.70/Mcfe.