ExxonMobil Corp. (NYSE: XOM) shelled out a staggering $6.6 billion—most of it upfront and in company shares—Jan. 17 for Delaware Basin acreage in the first mammoth Permian Basin deal by a supermajor.

The transaction with the Fort-Worth, Texas-based Bass family companies adds roughly 40% more acreage in New Mexico, more than doubling ExxonMobil’s Permian resource base, the company said.

ExxonMobil acquired about 275,000 acres—250,000 of it Permian leasehold—for about $20,000 per acre. About $1 billion of the asking price is based on contingency fees.

The acquisition is expected to add an “estimated resource” of 3.4 billion barrels of oil equivalent (Bboe), of which 75% is liquids, the company said. 

The transaction is the first to eclipse the $6 billion mark since Whiting Oil & Gas Corp. (NYSE: WLL) acquired Kodiak Oil and Gas in December 2014.

XTO Energy Inc., ExxonMobil’s subsidiary, already holds a 685,000-acre position in New Mexico, according to its website. ExxonMobil has been seen as a potential acquirer in the Permian due to its lack of shale exposure. In the Bass’s BOPCO LP, for instance, ExxonMobil stands to acquire the eighth-largest oil producer in New Mexico.

The bulk of the Permian acreage is in contiguous, HBP units, with more than 6 Bboe estimated in place, ExxonMobil said.

 “This investment gives us an exceptional Delaware Basin position in a proven multistacked play that can generate attractive returns in a low-price environment,” Darren W. Woods, ExxonMobil’s chairman and CEO, said in a statement.

Including Texas, ExxonMobil produces about 140 Mboe/d net across its Permian leasehold, which is managed by XTO.

The Bass family companies hold producing acreage in other areas in the U.S. with production of more than 18 Mboe/d, about 70% of which is liquids. A Bass family member did not respond to a request for comment.

“We think this is a slight positive for XOM, given that one of the main criticisms of the company is an undersized position in U.S. shale, particularly in the Permian,” said Brad Heffern, an analyst at RBC Capital Markets. “The valuation of about $20,000 to $24,000 per acre compares well with recent transactions, although we would also note that much of the acquired acreage appears to be outside the Delaware core.”

In 2015, BOPCO produced 15.1 Mbbl/d of oil in New Mexico and XTO produced 7.76 Mbbl/d, according to the New Mexico Energy, Minerals and Natural Resources Department. In 2016, XTO averaged 9 Mbbl/d, according to its website.

For the first nine months of 2016, BOPCO’s oil production was 300 Mbbl in Texas.

BOPCO’s wells are in Eddy County, N.M., according to state records. Of the wells with zone information, BOPCO held 123 Bone Spring wells and 23 Wolfcamp wells. However, some New Mexico Delaware drillers have shifted to permitting Wolfcamp wells and away from the Leonard Shale’s Bone Spring.

ExxonMobil did not detail what zones it would drill.

“Given its size, it is hard to move the needle at XOM, but a doubling in its Permian footprint does provide an avenue for growth in oil shale the company has been lacking,” said Roger Read, senior analyst at Wells Fargo Securities. “The relatively small volumes of current production indicate a high need to drill aggressively to get all the acreage to held by production [HBP] status in the coming years, based on our analysis.”

ExxonMobil will make an upfront payment of $5.6 billion in shares for the acreage. The company will also make a series of additional contingent cash payments totaling up to $1 billion, to be paid beginning in 2020 and ending no later than 2032, proportionate with the development of the resource.

 “By utilizing ExxonMobil’s technological strength coupled with its unconventional development capabilities, we can drill the longest lateral wells in the Permian Basin, reducing development costs and increasing reserve capture,” Woods said.

Darren Barbee can be reached at dbarbee@hartenergy.com. Emily Patsy can be reached at epatsy@hartenergy.com.