News Jan 17, 2017 12:03 PM EST

Exxon boosts Permian basin holding in deal worth up to $6.6 billion

By Staff Reporter

Exxon Mobil Corp (XOM.N) said on Tuesday it would buy companies owned by the Bass family of Texas in a deal worth up to $6.6 billion that would boost it presence in the Permian Basin, one of the country's most cost-effective oil fields.

Exxon said the acquired companies together hold about 275,000 acres of leasehold, producing more than 18,000 net oil equivalent barrels per day (boepd).

Exxon said its output from the basin is currently about 140,000 boepd, net.

An uptick in oil prices has been encouraging healthier energy companies to buy up assets - especially in the Permian Basin, which straddles Texas and New Mexico - that will give them a competitive edge once prices move higher.

Numerous companies including SM Energy Co (SM.N) and EOG Resources Inc (EOG.N) have snapped up acreage in the Basin. The latest deal was Noble Energy Inc (NBL.N) agreeing to buy smaller rival Clayton Williams Energy Inc (CWEI.N) for about $2.7 billion.

Exxon said it would make an upfront payment of $5.6 billion in stock. It will also make cash payments totaling up to $1 billion, from 2020 through no later than 2032, corresponding with the development of the resource, Exxon said.

The properties are a major addition to Exxon's unconventional liquids portfolio managed by its unit XTO Energy Inc [XEII.UL], Exxon Chief Executive Darren Woods said. Reuters

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