Exxon commences Marketing of its Shale Gas Properties in the U.S.
Exxon Mobil corp, the apex oil producer in the U.S. has kicked off marketing efforts to sell its U.S. shale gas properties, in a move to reignite its push to raise funds and let go of undesired assets. The company looks to raise billions of dollars, and reduce its debt burden from 2020.
Exxon Mobil set a target of $15 billion to be raised from sales by December 2021. The oil company set this target for itself three years ago. The company also recently promised to improve its sales that have been lagging recently; its sales improvement drive is vital to reducing the company’s $70 billion debt burden.
However, only about a third of the company’s three-year $15 billion sales target has been met, as the company’s income from sales through June this year is $557 million, and its pending deals this year are valued at more than $2.15 billion.
Exxon Mobil has an XTO Energy shale unit, and is seeking to sell about 5,000 gas wells in the Fayetteville Shale located in Arkansas through the unit. The company’s spokeswoman Julie King confirmed that they are currently seeking buyers for the nearly 5,000 natural shale wells.
Marketing the assets and wells is being done in-house by Exxon Mobil. The oil producer hopes to start receiving bids by the 16th of September, and finalize sales of the assets by the end of the year.
The wells weren’t randomly singled out for disposal either; they are among the company’s assets and projects whose production and market value have been trending downwards, and so it has become more profitable to the company to dispose them and focus on acquiring new assets and projects in places like Texas’s Permian Basin, Guyana, and offshore Brazil.
In 2010, Exxon Mobil purchased the Fayetteville assets for $650 million at a time shale was booming and changing the oil landscape. This boom led to a glut in the gas supply market that led to prices crashing to record lows. Last year, this development forced Exxon to reduce its oil and gas holdings in the US by $17 billion.
The assets on offer by Exxon Mobil have been recording declining output since 2016. The output of these assets has fallen by north of 50% since 2016 to 160 million cubic feet per day that was recorded last year. This was confirmed in Exxon Mobil’s marketing materials spotted by journalists.
In 2020, Exxon recorded an unprecedented and historic $22.4 billion loss. As a result of this, the company has embarked on the divestment of its properties worldwide. Exxon has been selling several properties in Africa, Asia, Europe, and the United States as a result.
Exxon has also made debt reduction and shareholder dividends its priority and has paid north of $7 billion of its debt burden this year alone. The company has also met with Savannah Energy, a British company to discuss properties in Chad and Cameroon. The rebound of oil and gas prices has helped improve interest in Exxon’s properties.