ExxonMobil doubled its Permian Basin resources on Tuesday after acquiring 250,000 acres in the play.
Exxon acquired companies owned by the Bass family of Fort Worth, Texas in a deal that includes an estimated resource of 3.4 billion barrels of oil equivalent in New Mexico’s Delaware Basin.
The Delaware Basin is a highly prolific, oil-prone section of the Permian Basin.
The acquired companies include the operating entity BOPCO AND hold about 275,000 acres of leasehold,.
The acreage includes about 250,000 acres of leasehold in the Permian Basin, with the bulk of those acres being contiguous, held-by-production units in the New Mexico Delaware Basin.
Exxon said the Delaware acres hold more than 60 billion barrels of oil equivalent estimated in place.
The acquired companies also hold producing acreage in other areas in the United States.
Production from the acquired companies currently sites at more than 18,000 net oil equivalent barrels per day, with about 70 percent being liquids.
ExxonMobil is producing about 140,000 net oil-equivalent barrels per day across its Permian Basin leasehold.
Exxon said it will make an upfront payment of $5.6 billion in ExxonMobil shares as well as a series of additional contingent cash payments totaling up to $1 billion.
The contingent cash payments are to be paid beginning in 2020 and ending no later than 2032 commensurate with the development of the resource, the company said.
The acquisition is expected to more than doubled Exxon’s Permian Basin resource to 6 billion barrels of oil equivalent.
Exxon chairman and CEO Darren W. Woods said the high-quality properties are a major addition to ExxonMobil’s unconventional liquids portfolio managed by its subsidiary, XTO Energy.
“This acquisition strengthens ExxonMobil’s significant presence in the dominant U.S. growth area for onshore oil production. This investment gives us an exceptional Delaware Basin position in a proven multi-stacked play that can generate attractive returns in a low-price environment,” Woods said.