Exxon Mobil buys Bass family holdings in Permian for $6.6 billion

January 17,2017

By Max B. Baker

Exxon Mobil is buying about 275,000 acres in the booming Permian Basin oil fields from the Bass family for $5.6 billion in stock and $1 billion in contingent cash payouts.

The Irving-based oil company, which owns XTO Energy in Fort Worth , said the purchase covers 3.4 billion barrels of oil equivalent, doubling Exxon Mobil’s resources in the Permian to 6 billion barrels. XTO will manage the project.

“This acquisition strengthens Exxon Mobil’s significant presence in the dominant U.S. growth area for onshore oil production,” Darren W. Woods, Exxon Mobil chairman and chief executive officer, said in a prepared statement. “This investment gives us an exceptional Delaware Basin position in a proven multi-stacked play that can generate attractive returns in a low-price environment.”

“The highly-contiguous position will provide significant cost advantages in developing 3.4 billion barrels of resource, of which 75 percent is liquids. By utilizing Exxon Mobil’s technological strength coupled with its unconventional development capabilities we can drill the longest lateral wells in the Permian Basin, reducing development costs and increasing reserve capture,” he said.

Frank McCreight, a representative of Bass family’s energy holdings, could not be immediately reached for comment.

The Bass family fortune started in the oil field when Sid Richardson, a Fort Worth bachelor who struck it rich in West Texas in the 1920s, went broke in the Great Depression, then remade his fortune in the late 1930s and the 1940s. When he died in 1959, he devoted $100 million to establish a foundation, and left the rest to his nephew, Perry Bass, and Bass’ four sons, Sid, Robert, Ed and Lee.

The brothers parlayed that inheritance into bigger fortunes through a series of savvy investments, including a big stake in Walt Disney Co., and became leaders in the redevelopment of downtown Fort Worth.

Exxon Mobil has 10 rigs working in the Permian and plans to add 15 or more after the acquisition closes in the first quarter of 2017, said SuAnn Guthrie, a spokeswoman for Exxon Mobil. She said a large majority of the acreage is expected to have attractive returns at $40 a barrel.

It is the seventh transaction in the Permian Basin by Exxon Mobil in the last three years and is its largest since the company bought XTO in 2010, she said.

The acquired companies include BOPCO, and some of the Bass employees will be offered opportunities at XTO, she said. Guthrie didn’t have any estimates on future hiring, since the acreage is held by current production not continuous drilling obligations.

Through the acquired companies, BOPCO holds about 275,000 acres of leasehold with production of more than 18,000 net oil equivalent barrels per day. This includes about 250,000 acres of leasehold in the Permian Basin, the bulk of it in contiguous, held-by-production units in the New Mexico Delaware Basin.