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By Jeremy Glaser | 12-15-2009 09:37 AM

ExxonMobil: Who's Next?

Morningstar's energy team looks at what could be next on ExxonMobil's acquisition target list.

Jeremy Glaser: I'm Jeremy Glaser with Morningstar.com. After ExxonMobil's historic deal to buy XTO, the question is what's next for ExxonMobil shareholders and next in the oil and gas space. Here to discuss with me is Associate Director of Research Eric Chenoweth and Senior Equity Analyst Justin Perucki. Gentlemen, thanks for joining me.

Eric Chenoweth: Thanks for having us.

Justin Perucki: Thanks, Jeremy.

Glaser: What are the implications for ExxonMobil shareholders?

Chenoweth: Like you mentioned, it's an historic deal. It marks a big strategy shift on Exxon's part to move full force into on-shore natural gas in the United States, and to eventually take that and use that model overseas as well in European shales. The deal itself is a big deal; it's a $41 billion deal. But for Exxon it really means about a 10% to 15% increase in their production and reserves. Really, the significance to us is that it's a platform for them. This really kicks off this new strategy to attack on-shore gas. It creates the largest US gas producer and it creates a platform.

XTO knows how to acquire and exploit and produce gas properties in the US, and now they have a big bankroll behind them in Exxon Mobile to go after this. So it's a big, big deal and it creates a new giant.

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