Exxon Mobil Corp. (NYSE:XOM) has entered into a non-monetary exchange agreement with LINN Energy LLC (NASDAQ: LINE) to add 17,800 net acres in the Permian Basin to its US oil and natural gas portfolio managed by subsidiary XTO Energy Inc.
“Our operated-acreage position in the Midland Basin Wolfcamp core is now around 120,000 net acres. We continue to increase drilling activity in the play, currently operating six horizontal rigs, and are very encouraged by initial well results.”
In the exchange, LINN Energy will receive interest in about 500 net acres from ExxonMobil’s South Belridge Field near Bakersfield, California.
In the agreement, ExxonMobil will receive 17,000 net acres in the Midland Basin core area in West Texas that is most prospective for horizontal Wolfcamp and Spraberry development, currently producing about 4,700 oil-equivalent barrels per day. ExxonMobil will also receive 800 net acres in the New Mexico Delaware Basin. Both acreage positions will be operated and developed by XTO Energy.
This is the second non-monetary exchange agreement with LINN Energy this year. In May, ExxonMobil added nearly 26,000 acres in the Permian Basin. In that agreement, LINN Energy received a portion of ExxonMobil’s interest in the Hugoton gas field in Kansas and Oklahoma.
This agreement extends XTO’s leasehold position across the entire Permian Basin to more than 1.5 million acres and net oil-equivalent production to more than 95,000 barrels per day.
LINN Energy will acquire ExxonMobil’s interests in the South Belridge Field, which produces approximately 3,400 barrels of oil per day.