It was only a matter of time before drilling machine XTO Energy
I first informed Fools about the industry's influx into this Appalachian acreage back in December. In short, the sedimentary rock layer known as the Marcellus shale, which stretches from West Virginia, through Pennsylvania, and up into Western New York, promises to pour forth a ridiculous amount of natural gas. Local producers like National Fuel Gas
Because XTO has less of an exploratory flair than the E&Ps mentioned above, the company took a little more time getting to know Mr. Marcellus. The two had dinner and engaged in polite conversation. Now they're ready to take the next step.
XTO has agreed to pay $600 million for Linn Energy's
So how much upside are we looking at here? In its press release, XTO cited Linn's figure of 2 trillion-4 trillion cubic feet of potential gas. I wouldn't be surprised if these shale-savvy guys surmise that there's even more in store. While this acquisition isn't transformative for XTO, which recently cited more than 11 trillion feet of low-risk upside potential, the purchase is a natural fit, and it ought to prove highly profitable.