XTO Energy Announces Bakken Shale Acquisition for $1.85 Billion in Cash and Stock
XTO Energy Inc. has entered into a definitive agreement to acquire producing properties and undeveloped acreage from privately-held Headington Oil Co. for $1.85 billion.
Consideration in the transaction includes $1.06 billion of cash and 11,742,391 shares of XTO common stock valued at approximately $790 million, or $67.35 per share.
The purchase includes 352,000 net acres of Bakken Shale leasehold in Montana and North Dakota. XTO Energy's internal engineers estimate proved reserves on the properties to be 68 million barrels of oil equivalent, of which 60% are proved developed.
Upon closing, the acquisition will add about 10,000 barrels of oil equivalent per day to the Company's growing production base.
The acquired properties are located in the Bar Trend and Nesson Anticline of the Bakken Shale development. At present, the primary producing field is Elm Coulee in Montana. Undeveloped leasehold comprises about 215,000 net acres of the total. Production volumes are 88% oil, but the associated natural gas is btu rich in composition, realizing a 30% premium to NYMEX pricing.
The acquisition is scheduled to close on or before July 15, 2008. Funding of the cash portion of the transaction will be provided through a combination of cash flow and commercial paper.