Super-major ExxonMobil Corp., Irving, Texas, (NYSE: XOM) plans to acquire independent and U.S. gas-focused XTO Energy Inc., Fort Worth, Texas, (NYSE: XTO) in an all-stock transaction valued at $41 billion, giving ExxonMobil exposure to all key unconventional resource basins in the U.S.

ExxonMobil will pay 0.7098 share per XTO share, a 25% premium to XTO’s closing price of $41.49 on Dec. 11, in a tax-free transaction. The transaction value includes $10 billion of existing XTO debt.

XTO holds interests in the Barnett, Haynesville, Fayetteville, Woodford, Marcellus and Bakken shales, the San Juan region, South Texas and the Gulf Coast, offshore Gulf of Mexico and the North Sea. It reports a resource base of 45 trillion cu. ft. of gas. The company’s proved reserves are approximately 13.9 trillion cu. ft. equivalent. Production is 2.3 billion cu. ft. equivalent per day (80% gas).

ExxonMobil chairman and chief executive Rex W. Tillerson says, “XTO is a leading U.S. unconventional natural gas producer, with an outstanding resource base, strong technical expertise and highly skilled employees. XTO’s strengths, together with ExxonMobil’s advanced R&D and operational capabilities, global scale and financial capacity, should enable development of additional supplies of unconventional oil and gas resources, benefiting consumers in the U.S. and around the world.”

Tillerson said the agreement is part of an ongoing, disciplined evaluation of timely investment opportunities to create value for shareholders, and to help meet long-term global energy demand.

ExxonMobil intends to establish a new upstream organization to manage global development and production of unconventional resources, enabling the rapid development and deployment of technologies and operating practices to increase production and maximize resource value. The new organization will be headquartered in XTO’s current offices in Fort Worth.

For the first nine months of 2009, ExxonMobil produced some 8.8 billion cu. ft. of gas per day, representing approximately 45% of total production. Pro forma, ExxonMobil will hold approximately 8 million unconventional acres, with approximately 60% outside of the U.S.

XTO chairman and founder Bob R. Simpson says, “XTO has a proven ability to profitably and consistently grow production and reserves in unconventional resources. As the world’s leading energy company, ExxonMobil will build on our success and open new opportunities for the development of natural gas and oil resources on a global basis.”

XTO was founded in 1986 and has about 3,000 employees.

J.P. Morgan Securities Inc. is financial advisor to ExxonMobil. Barclays Capital Inc. and Jefferies & Co. Inc. are financial advisors to XTO, and Barclays provided a fairness opinion.

Closing is expected in second-quarter 2010.

Stephen Richardson, analyst with Morgan Stanley & Co. Inc., values the deal at $2.91 per thousand cu. ft. (Mcf) on proved reserves and proved, probable and possible reserves of 45 trillion cu. ft. at $0.90 per Mcfe.

“While ExxonMobil’s bid for XTO holds positive valuation implications, we do not see the deal as a buy signal for the group,” Richardson says. “The approximate 25% premium highlights what we see as an approximate 25% average discount to fair value at the current forward curve (about $7 per Mcf long term), where the gas-levered E&Ps trade today. While we view this equity risk premium applied to the group as warranted considering risks to the forward curve, (this deal) shows that M&A remains a viable alternative for E&Ps looking to fill this gap between the equities and the commodity.”

He adds, “Thematically, we think the deal further validates the unconventional natural gas resource strategy employed by the U.S. independents over the past decade to the global integrated investor base. The deal likely accelerates the globalization of unconventional gas exploitation over the coming decade.”

Morgan Keegan Equity Research analyst Chris Pikul estimates the deal metrics at $2.80 per Mcfe using a year-end 2009 reserve forecast of 14.3 trillion cu. ft. equivalent, “a slight discount to our peer-group average of $3 per Mcfe.” He estimates 3P valuation at $0.70/Mcfe. “With XTO shares up only about 17% in 2009 prior to the deal, versus a peer-group average of about 50%, we’re not convinced this transaction appropriately compensates XTO shareholders for the company’s large low-risk resource potential of 45 trillion cu. ft. equivalent.”