Tuesday, January 31, 2017

More On The ExxonMobil - Bass Family - $5.6 Billion - Permian Deal -- January 31, 2017

  • acreage in "less-developed New Mexico, Delaware basin side of the Permian"
  • ExxonMobil bought out the Bass family's 250,000 acres
  • will add 3.4 billion of boe reserves; in effect, doubling its position in the Permian to 6 billion boe
  • Bass Family: $5.6 billion in shares, along with $1 billion contingency cash payments between 2020 and 2032
  • XOM pays 3.51%; 0.0351 x $5.6 billion = $200 million annually in dividends; lotsa money for fine arts in Ft Worth
  • the deal: priciest acquisition in the Permian this month
  • challenges:
    • geology
    • BLM
My hunch after XOM reported 4Q16 earnings today: XOM is in deep trouble. What could go wrong?
  • "less-developed area of the Permian"
  • geology makes it difficult
  • BLM makes it difficult (thank goodness Trump is POTUS)
Why does this remind me of Chesapeake's experience in the Bakken?

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