The rumors were true. Monday night, ConocoPhillips (NYSE:COP) announced that it is purchasing the large independent energy company Burlington Resources (NYSE:BR).

The nearly $36 billion deal features a combination of cash ($46.50 per Burlington share) and stock (0.7214 shares) that equates to upwards of $88 per share based upon Conoco's current stock price. That's a solid 16% or so premium to Burlington's stock before the rumors pushed up the price of the shares.

In terms of energy reserves, Conoco is paying almost $18 per barrel of oil equivalent. That number is based upon Burlington's end-of-2004 data, and I suspect that the reserve number today is in fact higher, but this still stands out as a very good price for Burlington. Moreover, the size of this deal makes up more than a third of Conoco's enterprise value and will be dilutive for the next two years.

By way of comparison, Occidental (NYSE:OXY) is paying a bit less than $9 per barrel for Vintage, Chesapeake (NYSE:CHK) recently paid about $12 per barrel for some large natural gas assets, and Gazprom paid about $8 per barrel equivalent in a recent deal. And, of course, you have other deals, such as those for Chevron (NYSE:CVX) and PetroKazakhstan, that were priced at about $10.50 and $12 per barrel, respectively.

Burlington is a relatively large player in natural gas, with less than 15% of its 2 billion barrels equivalent proven reserves in oil. And as we've all seen lately, with natural gas flirting with all-time highs, this is a hot area in a hot energy sector. What's more, the deal will help increase Conoco's production figures and should prove to be worthwhile even if gas prices head back into the single digits.

Conoco investors might be rightly concerned as to whether their company overpaid. I think it probably did. But by the same token, oil and gas companies have to have oil and gas to pump if they are going to make any money. Along those lines, buying Burlington is a faster and more certain means of adding reserves than investing in exploration and drilling. And as long as prices for natural gas stay in the high single digits or higher, this should ultimately pay off for the company.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).