ExxonMobil Corporation’s (XOM - Free Report) unit – XTO Energy – has entered into a purchase deal with California-based oil and gas producer BNK Petroleum Inc. for the majority of Tishomingo Field assets in Oklahoma. The purchase price is approximately $147.5 million.
XTO Energy will win rights over Tishomingo Field in the Woodford shale formation in southeastern Oklahoma, post purchase. BNK Petroleum will however retain its hold over the Caney and upper Sycamore formations. The transaction is expected to close in late April.
BNK is likely to use the funds raised from the sale to speed up its drilling activities in the Caney section and pursue exploration in Europe. It will also use the proceeds to pay back its debt.
Only last week, ExxonMobil announced a 45% growth target for North America oil and gas output over the coming 3 decades. The latest purchase is in sync with this strategy as it will enhance shale exploration in the region.
The U.S. shale formations, Canadian oil sands projects and the Gulf of Mexico (GoM) are likely to be the key catalysts for growth. Their easy accessibility and relatively economical production have attracted several oil majors, including ExxonMobil.
Further, several technological developments have been made to tap oil and gas from shale-rock formations as well as extracting oil and gas from oil sands and deep-water prospects in North America. These efforts have changed the energy outlook for the region.
ExxonMobil holds a Zacks Rank #3, which is equivalent to a short-term Hold rating. However, the Zacks Ranked #1 stocks of Enerplus Corporation (ERF - Free Report) , Range Resources Corporation (RRC - Free Report) and EPL Oil & Gas, Inc. are expected to outperform the market over the next few months.