Shifting Focus: ExxonMobil Unloads Permian Basin Assets
In a significant move, ExxonMobil has agreed to sell its conventional oil drilling assets in the Permian Basin to Hilcorp Energy for a whopping $1 billion. This deal marks a trend among US oil and gas companies to shed older properties, focusing on more lucrative ventures.
A Strategic Shift
ExxonMobil’s decision to divest its Permian Basin assets is part of a broader strategy to concentrate on high-growth shale drilling properties. Following its $60 billion acquisition of Pioneer Natural Resources in May, the company has been reviewing its portfolio to identify profitable assets and raise capital by selling non-core assets.
Hilcorp Emerges as the Successful Bidder
Hilcorp Energy, known for acquiring mature oilfields, has been a prominent buyer in this market. The company emerged as the successful bidder in the auction, which was kept confidential. With this deal, Hilcorp adds to its growing portfolio of conventional oil drilling assets.
Transaction Details
The sale involves conventional vertical wells, rather than horizontal wells used for shale extraction. The assets being sold have an estimated net production of around 26,000 barrels of oil equivalent per day and do not include assets acquired from Pioneer.
A Focus on Advantaged Assets
ExxonMobil’s spokesperson emphasized that the sale is consistent with the company’s strategy to focus investments on advantaged assets in its industry-leading portfolio. The deal is expected to close in the first quarter of 2025.
Hilcorp’s Growing Presence
Hilcorp, founded by billionaire Jeffery Hildebrand, has been expanding its presence in the oil and gas industry. Recently, the company completed a $1 billion acquisition of Eni’s offshore Alaska assets and was the undisclosed buyer in APA’s $950 million sale of conventional Permian properties agreed in September.
A New Frontier: Carbon Capture and Storage
In a separate development, ExxonMobil secured rights to the largest offshore carbon dioxide (CO₂) storage site in the US, following an agreement with the Texas General Land Office. This move positions the company to inject CO₂ deep beneath the Gulf of Mexico, potentially boosting the region’s carbon capture and storage capabilities.
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