Exxon Mobil said Monday it will buy XTO Energy in a stock swap valued at 31,000 million dollars. With this much big of a deal Exxon XTO is poised to be one of the largest if not the largest company in its industry.
XTO Energy now has natural gas fields that are highly valued. It is estimated that XTO has nearly 1.27 trillion cubic meters (45 trillion cubic feet) of that energy. This is why, coupled it with Exxon's power the new Exxon XTO will be a dominating factor in the oil and gas industry.
The two companies today issued a joint statement in which they pledge to strengthen ExxonMobil's position on the development of sources of oil and natural gas. However, Exxon Mobile and XTO Energy still need to get green go from the federal regulators.
According to the new Exxon XTO pact, Exxon Mobile will issue 0.7098 share for each XTO Energy shares. Currently at about 10.55 EST, XTO shares trade 45.97. Yesterday they closed 41.49.
XTO Energy shares rose nearly 18 percent this morning in the early trading. Yet, Exxon Mobile's shares dropped from yesterday's 72.84 to 70 dollars at this point in time.
New Exxon XTO deal also includes Exxon's paying 10,000 million dollars for XTO Energy's debt. This is why the readers may see in some places the cost of the Exxon XTO energy deal worth 31 billion dollars and in other places the estimate to be 41 billion dollars. It depends from which point of view it's looked at.
Written by Armen Hareyan
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