By Joseph BAMIDELE
IRVING-Texas-EXXONMOBIL today announced an agreement that will significantly increase its production acreage in the prolific Bakken oil shale region in the U.S. states of North Dakota and Montana.
ExxonMobil and its subsidiary, XTO Energy, signed an exchange agreement with Denbury Onshore, LLC, a subsidiary of Denbury Resources Inc., to acquire 100 percent of Denbury’s Bakken shale assets, which consist of approximately 196,000 net acres in North Dakota and Montana, with expected production in the second half of 2012 of more than 15,000 oil equivalent barrels per day.
The agreement increases ExxonMobil’s holdings in the Bakken region by about 50 percent to nearly 600,000 acres, giving the company a significant presence in one of the major U.S. growth areas for onshore oil production.
“This agreement provides a strategic addition to ExxonMobil’s North American unconventional resource base,” said Andrew P. Swiger, senior vice president of Exxon Mobil Corporation. “ExxonMobil’s financial and technical strength will support continued development of America’s natural resources, which strengthens U.S. energy security while creating jobs and new government revenues for vital services.”
In exchange for its Bakken shale assets, Denbury will receive $1.6 billion in cash and acquire ExxonMobil’s interests in the Hartzog Draw field in Wyoming and Webster field in Texas, which currently produce about 3,600 net oil equivalent barrels per day of natural gas and liquids.
The Bakken shale acreage will be operated by ExxonMobil subsidiary XTO Energy, which is a leading U.S. oil and natural gas producer and has expertise in developing tight gas, shale gas, coal bed methane and unconventional oil resources. XTO has operations in all major U.S. producing regions.
The agreement is subject to regulatory approval and due diligence reviews.