Exxon Mobil (NYSE:XOM) is now the largest natural gas producer in the United States. This happened on June 25th when the deal closed for the purchase of XTO Energy. Exxon plans to keep XTO's hedges for the 2010 - 2011 year in place., but will not hedge any production in the future.
They have also assumed $11 billion of debt and a share increase on outstanding shares of approximately 9 percent. Before the acquisition, Exxon had $2 billion worth of shares in the company. Their plan is to repurchase $3 billion in shares in the third quarter.
Exxon's also intends to restructure the debt once its economical. They are saying this does not change their focus on returns, but they admit it could be a few years away before returns on their investments may be seen. Due to the long term nature of the acquisition.
Short term they plan on drilling only the most attractive wells while holding on to their current uneconomical resources at the lowest possible cost. With little threat of their lease expiring and their financial strength, they can take there time and drill opportunistically unlike smaller exploration companies.
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