ExxonMobil Continues Expansion in the Marcellus, Buys Two More PA Drillers for $1.69 Billion, Adds Another 317K Acres of Leases
ExxonMobil has just picked up another 317,000 acres of gas leases in the Marcellus Shale by purchasing two privately held Pennsylvania drilling companies for $1.69 billion. Since last year, ExxonMobil has become the largest producer of natural gas in the U.S.
Exxon completed the purchases of Phillips Resources Inc., based in Warrendale, Pennsylvania, and TWP Inc. of Butler, Pennsylvania, on June 2, Alan Jeffers, the Irving, Texas-based spokesman at Exxon, said in a phone interview yesterday. The 200 employees at the two companies may be retained, he said.
Exxon paid $34.9 billion for XTO Energy last year, making it the biggest U.S. gas producer. The acquisition of Phillips Resources and TWP gives Exxon access to 317,000 acres in the Marcellus Shale, a gas-rich geological formation that stretches beneath several eastern states including New York, Pennsylvania and West Virginia.
“The fact that Exxon is buying in now is a vote of confidence in shale in the U.S.,” Tony Regan, a Singapore-based consultant at Tri-Zen International, said by telephone today. “There had been a feeling that activity might have peaked a bit. Exxon is a big, cautious company, and they wouldn’t have rushed into this.”
Exxon’s XTO unit will manage Phillips Resources and TWP, which held combined reserves equivalent to 228 billion cubic feet of gas at the end of 2010, Jeffers said.*
*Bloomberg Businessweek (Jun 9, 2011) – Exxon Expands U.S. Gas Reserves With $1.7 Billion Purchase