U.S. driller Presidio in talks to buy Exxon shale gas wells - Reuters

• Fayetteville Shale’s production capacity has declined by half since 2016, to around 227 million cubic feet per day

• The assets were valued between $400 million and $500 million

Texas-based Presidio Petroleum LLC is in advanced talks with Exxon Mobil Corp to acquire around 5,000 shale gas wells from the oil giant Reuters on Monday, citing two people familiar with the matter.

Since last year, Exxon’s XTO Energy unit has been seeking potential buyers for its assets in the Fayetteville Shale in Arkansas.

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The giant is planning to raise cash by selling off unwanted holdings.

Presidio, based in the neighboring state of Arkansas, backed by Morgan Stanley Energy Partners, buys mature oil and gas fields from other oil producers and tries to boost output.

Divestiture

The report said that the terms of the talks were not immediately available.

However, the sources also told Reuters that the deal talks can still fall apart, and Exxon could turn to another buyer or decide to retain the properties.

The wells were among natural gas properties, which Exxon bought for $650 million during a shale boom in 2010, which reshaped the U.S. energy landscape.

The company decided to multiple assets last year, and established a data room in November 2020  for potential buyers and put about 5,000 natural gas wells in the Fayetteville Shale on the block in August this year.

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A person familiar with the matter told Reuters that the producing properties were valued at that time at between $400 million and $500 million.

Exxon has previously indicated it aims to close any sale in January. The production capacity has declined by half since 2016, to around 227 million cubic feet per day (mcfd) in the first half of 2021, Reuters reported citing a marketing document seen by the news organization.

U.S. gas prices are up 67% year to date and were trading about $3.83 per million British thermal units on Monday.

Picture Credit: Shawcor