Zacks_Analysts' Blog : Exxon Divests XTO Assets - Analyst Blog

Irving, Texas-based ExxonMobil Corporation (XOM) has sold offshore crude wells and other assets from its XTO Energy unit to Dynamic Offshore Resources LLC for $182.5 million.

The sale comprises properties in the Gulf offshore areas including West Cameron 507, Main Pass 125, Breton Sound 53, South Marsh 269 and South Marsh 41. The divested properties produce more than 7,000 barrels of oil equivalent per day from 79 active leases covering approximately 130,000 net acres on the Gulf of Mexico Shelf. Operated properties include more than 90% of the proved reserve value and current output.

On the basis of a reserve report provided by Netherland, Sewell & Associates, Inc., the acquired assets contain proved reserves of 13.5 million barrels of oil equivalent as of July 31, 2011, of which about 40% is oil and the rest is natural gas, while 72% is proved developed.

ExxonMobil had acquired XTO’s offshore and onshore shale gas assets in a deal valued at $36 billion, including $11 billion in the XTO debt. With the XTO acquisition, ExxonMobil is enjoying access to significant unconventional resources and is now getting a major handle on North America's newest energy discoveries, as it looks forward to the growth of natural gas in expanding its share of the world's largest energy market.

The company continuously reviews its assets and divests those that do not fit its current or long-term operational and financial objectives. The same seems to have happened with XTO Energy.

Privately held by Riverstone Holdings LLC, Dynamic stated that the XTO assets, based in the Gulf of Mexico, will augment its reserves by 13.5 million barrels of crude, equivalent of a 31% increase.

ExxonMobil has a Zacks #3 Rank, which translates into a Hold rating for a period of one to three months. For the long term, we maintain a Neutral rating on the company. BP Plc (BP) and ConocoPhillips (COP) are major competitors of the company.