ExxonMobil's bid for XTO buoys analysts' views on 2011 gas prices

摘要

ExxonMobil's $41 billion acquisition of XTO Energy last week buoyed the gas market with analysts viewing the super-major's bid as a vote of confidence that gas prices will stage a meaningful recovery above $6/Mcf by 2011.rnExxonMobil "is making a huge bet on higher long-term natural gas prices," said Fadel Gheit, an exploration-and-production analyst at Oppenheimer. ExxonMobil "has indicated that its LNG projects in Qatar are profitable at low natural gas prices, but we doubt that the same situation holds with XTO's assets. We believe [ExxonMobil] will need a meaningful price recovery, above $6/Mcf or higher, by 2011 to earn an acceptable return on capital as a result of this acquisition."rnGheit added that while XTO has hedges covering 47% of its projected 2010 gas production at an average price of $7.49/Mcf, ExxonMobil does not use hedges.