Exxon Mobil Corp., the largest U.S. oil producer, has struck a significant deal to sell its conventional oil assets in the Permian Basin to privately held Hilcorp Energy for around $1 billion. This sale marks another step in Exxon’s ongoing strategy to streamline its portfolio, shedding mature, vertical wells in favor of high-growth shale properties. The transaction, expected to close in the first quarter of 2025, aligns with Exxon’s broader focus following its $60 billion acquisition of Pioneer Natural Resources, positioning the company to concentrate on more lucrative shale developments while leveraging the elevated market interest from private operators like Hilcorp.
Key Takeaways: Exxon Mobil’s Asset Sale in the Permian Basin
- Seller: Exxon Mobil Corp (XOM.N)
- Buyer: Hilcorp Energy, a private company founded by billionaire Jeffery Hildebrand
- Deal Value: Approximately $1 billion
- Asset Type: Conventional oil drilling assets (vertical wells, not shale assets)
- Production Estimate: Net production of around 26,000 barrels of oil equivalent per day (boe/d)
- Deal Closing: Expected in the first quarter of 2025
- Rationale for Sale:
- Aligns with Exxon’s strategy to divest non-core assets and focus on higher-growth shale opportunities
- Follows Exxon’s $60 billion acquisition of Pioneer Natural Resources, indicating a shift towards shale assets
- Hilcorp’s Strategy:
- Specializes in acquiring mature, conventional oilfields
- Continues to be a major acquirer of divested assets, including APA Corp’s $950 million sale of conventional Permian properties in September
- Recently completed a $1 billion acquisition of Eni’s offshore Alaska assets
Market Context
- Trend: U.S. oil companies, including Exxon, are divesting older, conventional assets in favor of shale-focused operations, driven by recent megamergers and portfolio optimization.
- Private Buyers: Companies like Hilcorp are capitalizing on the opportunity to purchase mature assets, maintaining production while public companies shift to high-growth shale plays.
This transaction is part of Exxon’s ongoing strategy to streamline its portfolio and focus capital on more profitable shale developments, particularly following its landmark acquisition of Pioneer Natural Resources.
