Exxon Mobil Corp. will spend $1.6 billion to boost its holdings in the massive Bakken oil field in North Dakota and Montana by 50 percent.
Exxon said Thursday it will buy all of the Bakken shale assets held by Denbury Resources Inc. for $1.6 billion in cash. Denbury will also receive Exxon's interest in two fields in Wyoming and Texas.
Exxon will acquire 196,000 acres, boosting its holdings in the region to almost 600,000 acres. The acreage acquired is expected to produce 15,000 barrels of oil and other hydrocarbons per day in the second half of this year. Exxon can increase production with new drilling in the future.
Oil production in the Bakken has soared in recent years, recently passing 600,000 barrels per day, or about 10 percent of total U.S. production. That's helped fuel the biggest jump in domestic oil production in more than 40 years. North Dakota recently passed Alaska and California to become the second biggest oil producing state in the U.S., behind Texas.
The deal is relatively tiny for Exxon, which produced an average of 4.2 million barrels of oil and other hydrocarbons per day in this year's second quarter. But even small additions help because oil and gas giants such as Exxon struggle every year to secure enough new resources to replace all that they've sold.
The purchase increases Exxon's U.S. oil production by about 3 percent. It also makes the Irving, Texas company one of the biggest leaseholders in the Bakken. Other big leaseholders in the region include Continental Resources Inc., EOG Resources Inc., Hess Corp. and Marathon Oil Corp.
Shares of Denbury, which is based in Plano, Texas, rose 62 cents, or 3.7 percent, to close at $17.34 Thursday. Exxon shares rose 95 cents, or 1 percent, to $91.52.