Natural gas producer XTO Energy said on Monday it has agreed to buy $1.1 billion of natural gas and oil fields from ChevronTexaco Corp. in its largest deal to date.
XTO has been buying properties to expand its exploration and production capacity. The deal is the latest of several major mergers in the oil industry since the start of April as the industry consolidates.
"In 2004, we have announced property acquisitions expecting to total almost $1.8 billion," said Bob Simpson, chairman and chief executive officer of XTO in the release.
For California-based ChevronTexaco, the sale is a step in a plan to divest nonstrategic assets and concentrate on core properties.
ChevronTexaco, the No. 2 U.S. oil company, said the sale from its North American Exploration and Production Co. included 150 onshore properties in seven U.S. states, with more than 90 percent of the current production located in New Mexico and Texas.
The acquisitions will initially add 88 million cubic feet of natural gas per day and 14,000 barrels of oil per day, according to XTO.
The deal will increase Texas-based XTO's production growth targets by 28 percent to 30 percent in 2004 and by 18 percent and 20 percent in 2005, the company said in a release.
ChevronTexaco Vice Chairman Peter Robertson said: "It is a key step in our drive to streamline our portfolio of assets to approximately 400 core fields that represent the vast majority of our long-term value in the United States and Canada."
ChevronTexaco forecast a significant gain to its income upon the close of the sale, expected in the third quarter.
