Exxon Mobil to buy XTO energy in big U.S. gas bet

NEW YORK (Reuters) – Exxon Mobil Corp will buy XTO Energy Inc in an all-stock transaction valued at about $30 billion, excluding debt, 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 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.

Analysts said the deal could be the beginning of a wave of consolidation in the energy sector has cash-rich companies such as Exxon move to snap up smaller players with attractive assets.

Exxon's shares fell 1.8 percent in premarket trading, while XTO shares jumped nearly 19 percent.

(Reporting by Matt Daily, editing by Maureen Bavdek)