In a significant strategic move, ExxonMobil Corporation (XOM), the largest oil producer in the United States, is reportedly seeking to sell a portion of its assets in North Dakota’s Bakken shale formation. According to Reuters, the company is targeting a deal that could generate at least $500 million, reflecting its ongoing efforts to optimize its portfolio and focus on high-growth areas.
ExxonMobil is currently exploring market interest for a portion of its Bakken shale holdings, which encompass approximately 137 operated and 676 non-operated and royalty wells spread across 49,000 net acres in North Dakota. This potential sale comes as part of XOM’s broader strategy to realign its portfolio following the $60 billion acquisition of Pioneer Natural Resources in May 2023. The sale is seen as a way to streamline its assets and direct its resources towards regions with greater potential for growth.
Despite the planned divestiture, ExxonMobil has reaffirmed its commitment to continued investment in North Dakota’s shale production as a core component of its long-term strategy. According to energy data provider Rextag, the company’s current total production from the Bakken region surpasses 100,000 barrels of oil equivalent per day (boe/d).
This potential sale of Bakken assets follows XOM’s earlier auction of conventional drilling assets in the Permian Basin earlier this year. The company’s focus on optimizing its vast holdings underscores its commitment to enhancing its scale and production efficiency in key areas, including the Permian and the newly acquired Pioneer assets. Many of the Bakken properties earmarked for sale are undeveloped, making them particularly attractive for buyers seeking to expand their land holdings.
ExxonMobil’s portfolio management strategy reflects a broader trend in the U.S. shale landscape. Companies are increasingly seeking to capitalize on high-growth opportunities while simultaneously monetizing less strategic assets. This approach allows them to allocate capital more effectively and maximize returns.
Zacks Rank & Key Picks
ExxonMobil currently carries a Zacks Rank #3 (Hold). Investors seeking exposure to the energy sector might consider alternative options with stronger rankings.
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Archrock Inc. (AROC):
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PEDEVCO Corp. (PED):
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MPLX LP (MPLX):
MPLX derives stable fee-based revenues from long-term contracts, minimizing exposure to commodity price fluctuations. The partnership’s robust capital expenditure forecast for 2024, coupled with significant expansion initiatives, underscores its commitment to sustainable growth. MPLX holds a Zacks Rank #2 (Buy) and a Value Score of B. The Zacks Consensus Estimate for MPLX’s 2024 EPS is projected at $4.29, and the company has seen upward earnings estimate revisions for 2024 and 2025 in the past 60 days.The sale of ExxonMobil’s Bakken assets represents a strategic shift for the company as it prioritizes higher-growth regions and seeks to maximize returns. It also highlights the dynamism of the U.S. shale landscape, where companies are constantly adapting to market conditions and seeking opportunities for growth and value creation.
