ExxonMobil expands Permian acreage, enters Utica agreement

XTO Energy Inc., a subsidiary of ExxonMobil Corp., has agreed to fund development to gain operating equity in 34,000 gross acres in the liquids-rich Wolfcamp in Texas’s Midland and Upton counties, increasing the company’s holdings in the Permian basin to just more than 1.5 million net acres.

XTO also has signed an agreement with American Energy–Utica LLC (AEU) that will enable AEU to earn 30,000 net acres of XTO’s Utica basin leasehold in Ohio’s Harrison, Jefferson, and Belmont counties.

In the Wolfcamp, Endeavor will continue to operate shallow production while XTO will drill and operate horizontal wells in the deeper intervals.

“The Wolfcamp shale is a vast, tight oil resource with tremendous potential,” said XTO Pres. Randy Cleveland. “The presence of multiple, stacked pay zones creates the potential for capital-efficient horizontal development, and the proximity to XTO’s ongoing Wolfcamp operations will offer operating cost efficiencies.”

In the Utica, XTO will continue to operate in a core area of 55,000 net acres, optimizing development by using proceeds from the transaction to fund 100% near-term development costs.

“We just initiated development in the Utica and are encouraged by results from our initial well that is producing at a peak 30-day rate of about 15 MMcfd of dry gas,” said Cleveland. “The agreement funds near-term development of a substantial operating position in this emerging play.”

XTO in 2013 expanded production in the Appalachia region by almost 30%, maintaining 645,000 acres in the Utica and Marcellus.

“These transactions underscore our commitment to developing high-margin liquids growth in areas such as the Permian, while also efficiently funding development of our extensive domestic natural gas resource in emerging plays such as the Utica,” Cleveland stated.