Analysts are crediting the planned acquisition of XTO by Exxon Mobil a major shift in trend. As Obama administration took office, it was all about exploring and developing alternate energy sources. However the planned deal would certainly shift the focus towards the conventional fossil fuels. The deal is also expected to moderately influence merger & acquisitions activity.
Exxon has also acquired XTO’s debt amounting some $10 Billion making the total amount of the deal to $ 41 Billion. Exxon’s acquisition of XTO is history’s one of the biggest M&A activity. The deal would certainly raise the natural gas stocks. It would also dispel all the uncertainty regarding gas stocks.
The deal came in the wake of the efforts being made by major oil explorers to tap shale rocks for natural gas. XTO was involved in the exploration of natural gas and making it available in consumable form, however XTO does not have retail operations.
The deal would also bail out the companies pitching in the efforts to extract gas from shale rocks.
Reportedly many major oil explorers are trying to develop shale as possible energy resource like Eni of Italy and BP.
The deal has gained so much approval that stock market pundits are advising to follow XTO.
IT IS EXPECTED THAT ENERGY STOCKS AND ESPECIALLY THE STOCKS OF COMPANIES INVOLVED IN THE EXPLORATION AND MARKETING OF GAS WOULD PICK PACE.
It is even said that following Exxon’s move, competitors like Chevron would be looking at buying companies like XTO.
Exxon XTO
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