Exxon Mobil Corp, the leading oil producer in the U.S., is planning to sell part of its assets in North Dakota’s Bakken shale formation, the company confirmed to Reuters on Tuesday.
Following a series of major mergers in the U.S. shale industry, oil producers like Exxon are reassessing their portfolios to determine which assets make sense to keep and which to sell off. ExxonMobil is currently gauging market interest in parts of its Bakken Shale Play, which includes about 137 operated wells and 676 non-operated and royalty wells spread across 49,000 net acres in North Dakota, according to a company spokesperson.
The sale could bring in over $500 million, according to two sources familiar with the situation. This move is part of Exxon’s ongoing efforts to focus on assets with the highest growth potential, especially after its massive $60 billion acquisition of Pioneer Natural Resources in May. The sources, who asked to remain anonymous because they are not authorized to speak publicly, noted that a significant portion of the land for sale is undeveloped. This could make it particularly attractive to buyers who are looking to expand their land holdings or boost production through future drilling.
Exxon emphasized that the decision is in line with the company’s strategy to regularly evaluate its portfolio. The company didn’t comment on the potential valuation, stating that it is standard corporate policy not to share such details.
Exxon is a major player in the Bakken, which is the third-largest oil-producing region in the U.S. The company’s production from the area exceeds 100,000 barrels of oil equivalent per day (boepd), according to energy data provider Rextag.
Despite the planned sale, Exxon says it will continue to invest in shale production in North Dakota as part of its long-term strategy. Earlier this year, Exxon also launched an auction to sell some of its conventional drilling assets in the Permian Basin, as reported by Reuters in June.
Exxon’s decision to divest some of its assets in the Bakken comes at a time when the company is concentrating on high-growth, high-return opportunities, particularly in the Permian Basin. The acquisition of Pioneer Natural Resources has significantly increased Exxon’s holdings in the Permian, a region renowned for its prolific oil output and favorable economics. By zeroing in on these high-potential assets, Exxon hopes to streamline its operations and maximize its return on investment.
Selling off assets in the Bakken could be seen as a smart move for Exxon. The Permian Basin is generally more cost-effective compared to the Bakken, boasting better infrastructure, lower production costs, and higher returns. By focusing its resources on the Permian, Exxon can take advantage of economies of scale and drive higher operational efficiency, especially since the Bakken has faced ongoing challenges related to infrastructure and takeaway capacity.
On the other hand, there are risks to pulling out of parts of the Bakken. The Bakken Shale Play is still one of the most productive regions in the U.S., and selling these assets means Exxon might miss out on future gains if oil prices climb or if technological advances make extraction more profitable. Plus, with much of the acreage being undeveloped, there is significant potential for future drilling—something that could have been lucrative for Exxon had they held onto it.
Recent moves by Exxon, including selling off conventional assets in the Permian Basin, suggest a broader strategy to concentrate on core operations that offer better growth prospects. This approach lets Exxon make the most of its scale and expertise, but it also means stepping away from assets that could still hold a lot of value. For Exxon, selling off assets in the Bakken appears to be a calculated move aimed at reallocating resources to maximize shareholder value in an increasingly competitive energy market.
Whether this strategy pays off will depend on a variety of factors—market conditions, oil prices, regulatory changes, and infrastructure development. If the Permian Basin continues to deliver high returns and infrastructure improvements help ease bottlenecks, this move could be a big win for Exxon. However, if conditions in the Bakken improve or if the demand for undeveloped land rises, Exxon might look back and see a missed opportunity.
