Exxon Mobil, already the largest U.S. natural gas producer, acquired two Pennsylvania-natural gas producer for $1.69 billion to boost shale reserves in Pennsylvania and the surrounding region. Exxon completed the purchases of Phillips Resources Inc., based in Warrendale, Pennsylvania, and TWP Inc. of Butler, Pennsylvania last week Bloomberg News.
In 2010, Exxon (XOM) paid $34.9 billion for XTO Energy, making the Dow component the largest U.S. natural gas producer. With the purchases of Phillips Resources and TWP, Exxon will have 317,000 acres in the Marcellus Shale.
Exxon's XTO unit will manage Phillips Resources and TWP, which held combined reserves equivalent to 228 billion cubic feet of gas at the end of 2010, Bloomberg reported. When Exxon purchased XTO, it said it intended to use the acquisition to bolster its shale exposure and production.
In the past five and a half years, natural gas futures have plunged almost 70% as producers have brought excess supply to market after moving to tap into various North American shale plays.