ExxonMobil Selling Shale Assets for $750MM

ExxonMobil Selling Shale Assets for $750MM
The transaction is expected to close in the second quarter of this year.

ExxonMobil has announced that it has signed an agreement with subsidiaries of BKV Corporation for the sale of operated and non-operated Barnett Shale gas assets in Texas for $750 million.

The deal includes additional payments, contingent on future natural gas prices, according to ExxonMobil, which noted that the sale supports its corporate strategy to prioritize investments on advantaged assets with the lowest cost of supply. The transaction is expected to close in the second quarter of this year.

ExxonMobil highlighted that it had removed the Barnett Shale gas assets, operated by its subsidiaries XTO Energy Inc. and Barnett Gathering LLC, from its development plan in 2020. As part of the deal, all employees with ExxonMobil subsidiaries in the Barnett Shale will receive full employment offers with BKV, ExxonMobil revealed.

“We are focused on delivering the most competitive returns to our shareholders by developing opportunities with the lowest cost of supply and further strengthening our industry-leading upstream position,” Liam Mallon, the president of ExxonMobil Upstream Company, said in a company statement.

“Our subsidiaries have operated in the Barnett Shale safely and responsibly for nearly two decades, and we are encouraged by BKV’s plans to develop the resource in line with its stated pathway to net zero greenhouse gas emissions by 2025,” he added in the statement.

Commenting on the deal, Chris Kalnin, BKV’s CEO, said, “our focus as a company is to drive value through continued expansion in the Barnett play with a strong focus on sustainability … This transaction falls in line with that vision”.

“We are excited about the extensive synergies this transaction presents, as well as additional access to premier Gulf Coast markets. We look forward to building upon the strengths of XTO Energy and its team to drive future growth,” Kalnin added.

Earlier this month, ExxonMobil revealed that it had reached an agreement to sell its Romanian upstream affiliate, ExxonMobil Exploration and Production Romania, to Romgaz for more than $1 billion, subject to Romanian government approvals. This deal, which is also expected to close in the second quarter of 2022, supports the company’s strategy to focus investments on advantaged assets, ExxonMobil highlighted in a company statement on May 3.

Last month, ExxonMobil announced estimated first-quarter 2022 earnings of $5.5 billion. First-quarter results included an unfavorable identified item of $3.4 billion associated with the company’s planned exit from Russia Sakhalin-1, Exxon highlighted. Earnings stood at $8.87 billion in the fourth quarter of 2021 and $2.73 billion in the first quarter of 2021, Exxon pointed out. 

To contact the author, email andreas.exarheas@rigzone.com

What do you think? We’d love to hear from you, join the conversation on the Rigzone Energy Network.

The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.