Today, ExxonMobil (NYSE:XOM) announced it had reached two separate agreements with American Energy–Utica and Endeavor Energy Resources, in Utica, Ohio, and the Permian Basin in Texas, respectively. The agreements will allow Exxon to further expand the assets of its oil and natural gas portfolio in the U.S.
The agreements have been made through ExxonMobil subsidiary XTO Energy, which manages the company's oil and natural gas portfolio in the United States.
The agreement with Endeavor Energy Resources will further increase the holdings of XTO to 1.5 million acres in the Permian Basin, which is a key area of onshore oil production in the United States.
Although Endeavor will maintain its operations of shallow production in the 34,000 gross acres of the agreement, XTO will in turn "drill and operate horizontal wells in the deeper intervals," giving it "substantial operating equity... in the prolific liquids-rich Wolfcamp formation in Midland and Upton counties."
In addition to the agreement with Endeavor, XTO also signed a separate deal with American Energy–Utica (AEU). While XTO will maintain its operations in its core area, which encompasses 55,000 net acres, the agreement announced today will give AEU access to approximately 30,000 acres of XTO's footprint in the Harrison, Jefferson and Belmont counties of Ohio.
The press release highlighted that the reason for the agreement with AEU was to allow XTO to optimize its development in its core area "by using proceeds from the transaction to fund 100 percent of near-term development costs." In total, XTO has approximately 645,000 acres in the Appalachia region, and it grew its production by almost 30% last year.
"These transactions underscore our commitment to developing high-margin liquids growth in areas such as the Permian, while also efficiently funding development of our extensive domestic natural gas resource in emerging plays such as the Utica," said XTO Energy President Randy Cleveland.
Patrick Morris owns shares of ExxonMobil. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.