NEW YORK (Reuters) - Exxon Mobil Corp will buy XTO Energy Inc in an all-stock transaction valued at about $30 billion, in a bid that thrusts the oil giant to the forefront of North America's fast-growing natural gas industry.
With the buy, Exxon, the world's largest publicly traded company, gains a major foothold into North America's newest energy discoveries as it bets on the growth of natural gas expanding its share of the world's largest energy market.
The bid, announced on Monday, spurred expectation of a wave of consolidation in the energy sector as cash-rich companies such as Exxon move to snap up smaller players with attractive assets.
"There will be more of these deals, and it will make the industry more resilient to volatility in natural gas prices," said Fadel Gheit, an analyst at Oppenheimer & Co.
The Select Sector SPDR Energy ETF gained 1.6 percent, Chesapeake Energy Corp jumped 7 percent to $24.70, while Devon Energy Corp rose 5.3 percent to $67.33 in early trading.
The deal is valued at $41 billion, including about $10 billion in XTO debt, and is based on the December 11 closing share prices in the two companies.
Exxon will issue 0.7098 common share for each share of XTO, representing a premium of about 25 percent over XTO's closing price on Friday.
XTO is one of the leading developers of unconventional natural gas resources, such as shale gas, which have emerged as a potentially huge new resource play in North America.
"Natural gas is trading at historical lows. Exxon is making a bullish statement about natgas prospects, and if others agree, you could see more deals like this, but only time will tell," said Tom Schrader, managing director for U.S. Equity Trading at Stifel Nicolaus Capital Markets in Baltimore.
U.S. natural gas prices have been under pressure as inventories of the fuel rose to record high levels, but prices have begun to firm in recent weeks as winter temperatures tap into those stockpiles.
Exxon Mobil's Chief Executive Rex Tillerson said on a conference call the purchase would increase the company's resource base about 10 percent.
He added that the deal did not affect Exxon's plan to invest in Ghana. Exxon has agreed to buy a stake in the giant offshore Jubilee oil field, among the largest oil finds in Africa.
Exxon's shares fell 2.5 percent to $71, while XTO shares jumped 18 percent to $48.95 on the New York Stock Exchange.
JPMorgan advised Exxon Mobil and Barclays Capital Inc , and Jefferies & Company Inc advised XTO.
(Reporting by Matt Daily, with additional reporting by Phil Wahba and Megan Davies in New York, editing by Maureen Bavdek)
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