CAMARILLO, Calif. (AP) -- California-based oil and gas producer BNK Petroleum Inc. on Sunday said it reached a deal to sell property in Oklahoma to a unit of Exxon Mobil Corp. for $147.5 million.
An Exxon spokesman confirmed the deal, which involves its subsidiary XTO Energy purchasing property in the region known as the Tishomingo Field in the Woodford shale formation in southeastern Oklahoma.
The sale is expected to close in late April.
Exxon bought XTO Energy in 2010 for more than $30 billion, and in the process became the largest natural gas producer in the U.S.
Technology involving horizontal drilling and hydraulic fracturing, or fracking, to extract natural gas from prehistoric shale rock formations was developed around 2005, and has led to a production boom across the U.S. The increased supply has resulted in price drops for the fuel in the past few years, but Exxon has stated that it expects natural gas demand to pick up in coming decades and replace coal by 2025 as the second most popular energy source, behind oil.
While most of the energy giant's new projects this year are focused on oil rather than gas because of the low prices, CEO Rex Tillerson said earlier this month that further advances in exploration and drilling technology have reduced costs.
The deal with BNK does not include property in the Caney and upper Sycamore shale formations. BNK expects to use its proceeds from the sale to accelerate its drilling operations in the Caney section, along with ongoing exploration efforts in Europe and to repay debt.
Exxon Mobil Corp. shares closed Friday at $89.37, up about 3 percent since the start of the year. The stock has traded between $77.13 and $93.67 in the past 52 weeks.