Exxon Mobil (XOM) has embarked on an asset divestment spree in the U.S. Reuters reports that the company plans to sell shale gas properties in the Appalachian basin in Ohio, stretching 27,000 acres. XOM shares jumped 4.21% to close at $71.35 on January 11.
Exxon Mobil is a U.S. company that engages in exploring, developing, and distributing oil, gas, and petroleum products.
The oil producer has put 61 wells on the market that produced 81 million cubic feet per day last year. Marketing documents seen by Reuters also indicate that Exxon Mobil plans to sell another 274 wells operated by other companies.
Exxon Mobil has already furnished parties with all the necessary information pertaining to the assets. The company’s spokeswoman Sarah Nordin confirmed that no deal has been reached and no buyer has been identified.
The proposed sale could fetch the oil and gas company up to $200 million based on current natural gas prices. In 2020 the company incurred about $20 billion in write-downs on properties purchased a decade earlier through its XTO Energy subsidiary. Following the write-downs, it removed its Texas gas and other assets as part of a new development plan.
Three years ago, Exxon Mobil announced plans to raise about $15 billion through asset sales. Last year, it accelerated the plan through the marketing of assets as energy prices recovered.
Earlier this week, Bank of America Securities analyst Doug Leggate reiterated a Buy rating on the stock and raised the price target to $100 from $95, implying 40.15% upside potential to current levels.
Consensus among analysts is a Moderate Buy based on 6 Buys, 7 Holds, and 1 Sell. The average Exxon Mobil price target of $74.86 implies 4.92% upside potential to current levels.
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