Oil and gas giant Exxon Mobil Corp. has completed the acquisition of XTO Energy Inc. and created a new organization to focus on the production of alternative natural gas and oil resources. The all-stock transaction, valued at $41 billion. In this acquisition, each common share of XTO had been converted into the right to receive 0.7098 shares of ExxonMobil common stock, with cash to be paid in instead of any fractional shares.
I believe this new organization will create opportunity for more jobs and investment in the production of “clean” natural gas both in the United States, and around the world.
Now Exxon is struggling to find more oil. “Exxon said in the report that it more than made up for the shortfall in oil by stocking up on natural gas, mostly through its acquisition of XTO Energy Inc. last year.” Exxon now has more natural gas in reserve for future production than oil.
Company spokesman Alan Jeffers says the company's "focus is on resources and projects that add shareholder value." That can be accomplished by finding oil, he says, but value can also be delivered through a corporate acquisition.
Exxon is the largest U.S. Company, and it has done so by market capitalization. But as we know, new technologies have helped vast resources of natural gas, however the growing demand from emerging economies raised oil prices up strongly.
If I were an investor, I would be wondering if Exxon bought XTO last year just to cover the level of their substitute problem.
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