ExxonMobil has reached an agreement to divest its conventional oil drilling assets in the Permian Basin, located in Texas and New Mexico, to Hilcorp Energy for approximately $1bn, reported Reuters, citing sources.
This deal reflects a trend among US oil and gas companies to divest older properties. Hilcorp, known for acquiring mature oilfields, has been a prominent buyer in this market.
According to the report, the transaction involves conventional vertical wells rather than the horizontal wells used for shale extraction. Exxon confirmed the sale but did not disclose the buyer or the valuation.
Exxon was auctioning the assets and focusing on high-growth shale drilling properties following its $60bn acquisition of Pioneer Natural Resources in May, the report stated.
Hilcorp emerged as the successful bidder in the auction, which was kept confidential. The company did not respond to requests for comment.
Exxon is reviewing its portfolio to concentrate on profitable assets and raise cash by selling non-core assets.
An Exxon spokesperson said: "The sale is consistent with our strategy to focus investments on advantaged assets in our industry-leading portfolio."
The deal is expected to close in the first quarter of 2025, the spokesperson added.
The assets being sold to Hilcorp have an estimated net production of around 26,000 barrels of oil equivalent per day and do not include assets acquired from Pioneer, said the report.
Hilcorp, founded by billionaire Jeffery Hildebrand, recently completed a $1bn acquisition of Eni's offshore Alaska assets.
Additionally, Hilcorp was the undisclosed buyer in APA's $950m sale of conventional Permian properties agreed in September.
Recently, ExxonMobil secured rights to the largest offshore carbon dioxide (CO₂) storage site in the US, following an agreement with the Texas General Land Office.
The move positions the company to inject CO₂ deep beneath the Gulf of Mexico, potentially boosting the region's carbon capture and storage capabilities.
The lease grants ExxonMobil access to more than 271,000 acres of offshore land in Jefferson, Chambers and Galveston counties, where CO₂ will be injected into geologically stable layers around one to two miles (1.6km–3.2km) below the ocean’s surface.
