Exxon Continues To Shed Shale Assets

ExxonMobil has started marketing gas assets in the Fayetteville Shale in Arkansas, the US supermajor’s spokeswoman Julie King told Reuters on Wednesday.

Since before the pandemic, Exxon has been marketing and divesting assets, focusing on key strategic operations such as the Permian Basin, Guyana, and Brazil.

“90 percent of our upstream investments in resource additions, including in Guyana, Brazil, and the U.S. Permian Basin, generate a 10 percent return at $35 per barrel or less,” Exxon’s chairman and chief executive Darren Woods said on the investor day in March 2021.

While focusing on these areas, Exxon is looking to divest assets elsewhere, and the shale gas assets in Arkansas are now up for sale.

“We are providing information to third parties that may have an interest in the assets,” Exxon’s spokeswoman King told Reuters. The company declined to comment which could be the potential bidders. 

Exxon’s subsidiary XTO Energy operates more than 662,000 acres in 16 counties in Arkansas, with production at 271 million cubic feet of gas per day, according to XTO Energy.

Privately owned Merit Energy—which had acquired acreage in the area from BHP in 2018—is assessing the assets that Exxon has put up for sale, a source with knowledge of the matter told Reuters.

Related: Oil Prices Rebound From Three-Week Lows

In February this year, ExxonMobil said it would sell most of its non-operated assets in the UK’s central and northern North Sea to private equity fund HitecVision for more than $1 billion.

“We continue to high-grade our portfolio by divesting assets that are less strategic and focusing our investments on our advantaged projects that are among the best in the industry,” Neil Chapman, senior vice president of ExxonMobil, said in February.

On the Q2 earnings call at the end of July, CEO Woods said:

“To strengthen the earnings and cash flow potential of our assets, our plans will continue to advance high-return, advantaged projects and high-grade our existing assets through accretive divestments.”  

By Charles Kennedy for Oilprice.com

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