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Exxon Mobil, LINN Energy strike dealMay 21, 2014
A. Lee Graham
Exxon Mobil Corp. of Irving has executed an agreement to add almost 26,000 acres to its U.S. oil and natural gas portfolio managed by XTO Energy Inc. through a non-monetary exchange with LINN Energy LLC.
In exchange, LINN will receive part of XTO’s interest in the Hugotron gas field in Oklahoma and Kansas.
“This Midland Basin leasehold is in a prolific area where we expect rapid, profitable development of multiple horizons in the Wolfcamp and Spraberry formations,” said Randy Cleveland, president,, XTO Energy, in a news release.
“With this agreement and our previously announced transaction with Endeavor Energy Resources, we will increase our operated position in the Midland Basin Wolfcamp core to roughly 100,000 net acres and our total position in the basin to 300,000 net acres,” Cleveland said.
XTO will receive 25,000 net acres in the northern Midland core area that is considered conducive for horizontal Wolfcamp and Spraberry development, with current production of about 2,000 oil equivalent barrels per day, Exxon Mobil said. XTO also will receive 1,000 net acres in the New Mexico Delaware Basin that augments its existing leasehold and near-term development.
“This brings our leasehold position in the Permian Basin to over 1.5 million acres and in excess of 90,000 net barrels of oil-equivalent daily production,” Cleveland said.
LINN will acquire a portion of XTO’s interests in the low-decline, mature Hugoton gas field, including all non-royalty trust interests in the shallow formations, with current production of about 85 million equivalent cubic feet per day, 80 percent of which is natural gas.