Exxon Pays $1.69 Billion for Warrendale-Based Marcellus Firm

Exxon Mobil Corp. last week picked up Warrendale-based natural gas company Phillips Resources and its related company, Butler’s TWP Inc., for a price tag of $1.69 billion.

The move gives Exxon about 317,000 more acres for exploration in Pennsylvania’s Marcellus shale basin, according to XTO Energy Inc. spokesman Jeff Neu.

Neu said XTO Energy, a subsidiary of ExxonMobil, would manage
Phillips companies assets from its Appalachia Division headquartered in
western Pennsylvania.

"We believe the mergers will create significant value by leveraging the
regional synergies in upstream operations and acreage holdings between XTO
Energy Inc. and the Phillips companies," he said.

According to the Phillips Resources website, the company has been in Western Pennsylvania for 35 years and has operated or participated in the drilling of more than 50 Marcellus Shale wells. It has approximately 250,000 net acres of land holdings.

Neu said the company plans to retain the 200 Phillips Resources and TWI workers as Exxon Mobil employees.

The year-end 2010 proved reserves for the Phillips companies were 228 billion cubic feet and they produce approximately 50 million net cubic feet per day of natural
gas, Neu said.

Reuters today cited Exxon as the largest producer of natural gas in the United States. The article said the company spent about $30 billion last year to buy the Texas-based XTO Energy, a leading developer of shale gas and with resource base of 45 trillion cubic feet of gas equivalent.