XTO Energy Buys Bakken Shale Holdings

XTO Energy Buys Bakken Shale Holdings

XTO Energy is acquiring oil producing properties and undeveloped land from Headington Oil for $1.85 billion in cash and stock.

XTO Energy Inc. will buy 352,000 acres of Bakken Shale land in Montana and North Dakota. XTO estimates there are 68 million barrels of oil equivalent in proved reserves on the land. The acquisition will increase XTO’s production by 10,000 barrels of oil equivalent per day.

Fort Worth, Texas-based XTO will spend $1.06 billion in cash, with the rest from common stock valued at $790 million, or $67.35 per share.

Citi Investment Research analyst Gil Yang thinks the price is right, and the deal is “extremely favorable” for the company in the high-priced oil and gas environment.

The U.S. Geological Survey recently estimated that the Bakken Shale area of Montana and North Dakota could hold as much as 4.3 billion barrels of oil.

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