Under terms of the agreement, ExxonMobil has agreed to issue 0.7098 common shares for each common share of XTO. This represents a 25% premium to XTO stockholders. The transaction value includes $10 billion of existing XTO debt and is based on the closing share prices of ExxonMobil and XTO on December 11, 2009.
Rex Tillerson, chairman and CEO of Exxon Mobil, said: “We are pleased that ExxonMobil and XTO have reached this agreement. XTO is a leading US unconventional natural gas producer, with an outstanding resource base, strong technical expertise and highly skilled employees. XTO’s strengths, together with ExxonMobil’s advanced R&D and operational capabilities, global scale and financial capacity, should enable development of additional supplies of unconventional oil and gas resources, benefiting consumers both here in the United States and around the world.”
Following the transaction closing, Exxon Mobil intends to establish a new upstream organization to manage global development and production of unconventional resources, enabling the development and deployment of technologies and operating practices to increase production and maximize resource value. The new organization will be located in Fort Worth, Texas, in XTO’s current offices.
The agreement is part of an ongoing evaluation of investment opportunities to create value for shareholders, and to help meet long-term global energy demand growth. Completion of the transaction is expected in the second quarter of 2010.
