A customer holds a gas pump handle at an Exxon station in Vancouver, Wash. Exxon Mobil Corp. sets quarterly profit record for U.S corporations at $14.83 billion


Exxon Mobil will buy XTO Energy in an all-stock deal worth $31 billion as the oil giant moved aggressively Monday to capitalize on the growing supply of natural gas at home.

The deal could signal a new rush to own natural gas assets by major integrated producers, and perhaps the start of a significant consolidation in the energy industry. "Exxon is the group leader and it sets the trend. I would expect more acquisitions in the next three to six months," said Fadel Gheit, senior energy analyst for Oppenheimer. "Who that will be is the $64,000 question.


Exxon is closely watched in the industry and an acquisition like XTO could prompt other companies like Royal Dutch Shell PLC, BP BLC or Chevron Corp. to move.

Potential targets include big natural gas companies like Chesapeake Energy, Devon Energy and Anadarko, Gheit said.

XTO shows the priority that major producers are giving to natural gas as a fuel source. New technology has unlocked trillions of cubic feet of natural gas at home, meaning energy producers do not have to navigate tricky political environments overseas.

That doesn't mean that those projects are being excluded.
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Exxon just last week gave the go-ahead for a $15 billion natural gas project in Papua New Guinea, positioning the world's largest publicly traded oil company to provide energy to a fuel-hungry China.

XTO claims about 45 trillion cubic feet of gas, much of it trapped in tight formations known as shale.

Exxon has signaled recently that it was moving increasingly toward landing natural gas assets. Once the deal closes, Exxon said it will establish a new organization to manage global development and production of unconventional resources.

The company, based in Irving, Texas, will issue 0.7098 common shares for each common share of XTO, representing a 25 percent premium to XTO stockholders. Exxon also will assume $10 billion in XTO debt.

The deal values XTO's shares at $51.69, based on the closing price Friday.

"XTO has a proven ability to profitably and consistently grow production and reserves in unconventional resources," Bob Simpson, chairman and founder of XTO, said in a statement.

Simpson is one of the highest paid executives in the United States. His compensation last year was valued at $53.5 million.

He retired as CEO in 2008.
Original Post
quote:
Exxon just last week gave the go-ahead for a $15 billion natural gas project in Papua New Guinea, positioning the world's largest publicly traded oil company to provide energy to a fuel-hungry China


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Wonder how the deal with work out with the new 'Emerging market' China.
quote:
Simpson is one of the highest paid executives in the United States. His compensation last year was valued at $53.5 million



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Some of these guys are really overpaid..
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Originally posted by alena:
quote:
Simpson is one of the highest paid executives in the United States. His compensation last year was valued at $53.5 million



................................................
Some of these guys are really overpaid..


More than some. While none should envy people who do what is special, there really is a disturbing disconnect between those who do what is special and those who do what is right. And with the problem with the SEC, many of these people are hiding the nasty stuff on their balance sheets.
Exxon maybe hopes to export this gas to China, Natural gas will soon be displaced by shale gas in the US. Shale gas abounds in the US once concerns about rock fracturing is settled. When I worked in Venezuela we used to burn off the gas as it not commercially viable to sell or export, even now most households in Venezuela pay a flat rate of US$30/year for gas.
quote:
Originally posted by ksazma:
More than some. While none should envy people who do what is special, there really is a disturbing disconnect between those who do what is special and those who do what is right. And with the problem with the SEC, many of these people are hiding the nasty stuff on their balance sheets.


I once accompanied Saudi sheik Yamani to a jewel store where he bought $200,000 in emeralds and diamonds for his 4 wives. Big Grin
quote:
Originally posted by Sunil:
Exxon maybe hopes to export this gas to China, Natural gas will soon be displaced by shale gas in the US. Shale gas abounds in the US once concerns about rock fracturing is settled. When I worked in Venezuela we used to burn off the gas as it not commercially viable to sell or export, even now most households in Venezuela pay a flat rate of US$30/year for gas.



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Yes the plan is to export to China.

What is Shale gas? Don't we all wish our gas bill was $30. Smile
quote:
Originally posted by alena:

What is Shale gas? Don't we all wish our gas bill was $30. Smile


Shale gas is natural gas trapped in shale rock, unlike normal natural gas formation where the gas found mixed in or on top of oil formations. To get shale gas out you have to break up the shale rocks physically(hydraulic fracturing) or use high pressure steam.

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