logo
  Join        Login             Stock Quote

Exxon-XTO Energy Merger Completed

 June 29, 2010 09:17 AM
 


The U.S. oil giant ExxonMobil Corp. (XOM) completed the proposed merger with the unconventional player XTO Energy Inc. (XTO) last Friday. The deal creates a new organization that will focus on global development and production of unconventional resources. The new organization will retain its identity as XTO Energy Inc. and will keep its head office in Fort Worth, Texas.

The $41 billion (including debt) merger will augment Exxon's position in the development of unconventional resources, which will create sustainable and long-term value for its shareholders. Moreover, the merger undoubtedly brings good news for Americans as it is a step forward in the production of more clean natural gas.

Under the terms of the merger agreement announced last December, Exxon had decided to issue 0.7098 common shares for each common share of XTO Energy.

After this deal, Exxon will have access to significant unconventional resources and get a major grip over North America's newest energy discoveries, as it looks forward to the growth of natural gas in expanding its share of the world's largest energy market.

XTO Energy's current unconventional resource base consists of 45 trillion cubic feet of gas, which will be an ideal foil for Exxon's holdings in the United States, Canada, Germany, Poland, Argentina and Indonesia.

Given Exxon's $5 billion cash in hand (at the end of first quarter) and XTO Energy's solid cash generating capability, we anticipate buybacks to accelerate. While Exxon's shares have been experiencing a downside in the last two months (down more than 12%), we believe that the completed deal will lift them in the near to medium term. Our Neutral recommendation on Exxon shares remains unchanged at this stage.
iOnTheMarket Premium
Advertisement

Advertisement


Comments Closed


rss feed

Latest Stories

article imageIn A World Of Artificial Liquidity – Cash Is King

It's more crucial now than ever for people to consider extracting a portion of cash from their bank read on...

article imageDid The IMF Provide Support To Syriza?

The IMF published yesterday a preliminary analysis on the debt sustainability of the Greek read on...

article image3 Defensive Stocks Offering Safety, Yield In A Turbulent Market

The world can be a scary place to invest these days. Greece can't pay its debts, Russia is a mess, China's read on...

article imageFour Stocks in the Dow Making Fresh 52 Week Lows

“What gets weak tends to get weaker; what gets strong tends to get read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.