Sources: Exxon will sell its older Permian assets for $1 billion to Hilcorp
Four sources with knowledge of the matter said that Exxon Mobil Corp, the top U.S. oil company, has agreed to sell its conventional oil drilling assets located in the Permian basins of Texas and New Mexico for a price around $1 billion to Hilcorp Energy.
This deal is part of a growing trend among U.S. oil companies to sell off older properties after a wave of record-breaking acquisitions. Hilcorp, a private operator, has been one of the most active buyers.
Exxon confirmed that the assets had been sold but refused to reveal the buyer or the valuation. The company used terms to indicate the properties were vertical conventional wells and not horizontal wells for shale.
The spokesperson for Exxon said that the sale was in line with the company's strategy of focusing investments on assets that are advantageous in its industry-leading portfolio. She added that the deal would close in the first half of 2025.
In June, it was reported that Exxon would be auctioning off its assets in order to concentrate on shale properties with higher growth rates. This follows the $60 billion acquisition of Pioneer Natural Resources by Exxon in May.
The sources, who requested anonymity because the auction was confidential, said that Hilcorp, a company that specializes in purchasing mature oilfields won the auction.
Hilcorp has not responded to any requests for comment.
Exxon, like other companies that have taken advantage of the sharply increased commodity prices in recent years to pursue megamergers has reviewed its portfolio and focused on its most lucrative assets. It also raised cash by selling non-core assets.
One source said that the assets purchased by Hilcorp from Exxon are expected to produce a net of 26,000 barrels equivalent per day. They added that the sale excludes assets purchased from Pioneer.
Hilcorp, the company founded by Jeffery Hildebrand (a billionaire), has been one of the most active buyers in recent years. This month, the company completed a $1 billion acquisition of Italian group Eni’s Alaskan offshore assets.
Sources said that the buyer of APA Corp’s $950m sale of conventional Permian property agreed in September was also an undisclosed party.
APA Corp didn't immediately respond to comments. Reporting by Shariq and David French, New York; editing by Chizu Nomiyama
(source: Reuters)