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Exxon planning to sell assets: Reuters
Posted on Friday, 22 November 2019 12:07
Three banking sources have told Reuters Exxon Mobil is planning to divest assets worth as much as USD 25.00 billion.
The operations in question comprise oil and gas fields throughout 11 countries in Europe, Asia and Africa, the people said. A sale would see it essentially exit its European upstream oil and gas business, they added, although it will retain its share of the Groningen gas field in the Netherlands.
According to Reuters’ sources, the divestment is taking place in order to bring in funds to be used to concentrate on a small number of very large new projects, while the move would also serve to address the concerns of investors unhappy with the firm’s cash generation and oil output.
These new developments in question are likely to be located in Guyana, Mozambique, Papua New Guinea, Brazil and the US, the people noted.
Reuters said the planned sale is also in line with Exxon’s hopes to catch-up with competitors which responded more quickly to the drop in oil prices which occurred in 2014, having conducted portfolio reviews and subsequent asset sales around that time.
A spokesman for the company declined to give any specifics on the assets to be offloaded, but effectively confirmed that they would total USD 25.00 billion in value, saying it has told Wall Street as much.
Zephyr, the M&A database published by Bureau van Dijk shows that any asset sale would not be Exxon Mobil’s first of 2019; in September, it agreed to divest its Norwegian offshore oil and gas field assets to Var Energi for USD 4.50 billion.
The firm’s stock closed up 2.4 per cent at USD 69.67 on 21st November, following the Reuters report.
Zephyr shows that the most valuable deal targeting an oil and gas extraction company to have been announced worldwide during 2019 to date is Occidental Petroleum’s USD 55.00 billion offer to acquire Anadarko Petroleum, which closed in August.
© Zephus Ltd