Former U.S. Secretary of State Rex Tillerson admits Exxon Mobil Corp. paid too much when it acquired XTO Energy Inc. for $31 billion.
XTO Energy is a major operator in Oklahoma with its Mid-Continent Division headquarters in Oklahoma City.
“We probably paid too much,” said Tillerson, who served as chief executive officer of the company during the deal. He made the comments this week at a conference in Houston sponsored by KPMG LLP.
“At the time we were looking at gas prices, I think the general consensus was we’d stay around $5, maybe $6. Of course, it never saw those numbers again,” added Tillerson who left Exxon to run the State Department.
But he defended what XTO contributed to Exxon since then. Bloomberg News reports that Tillerson said he was “proud” of the purchase for the new operational techniques it brought to Exxon. Plus, the deal eventually returned more than $300 billion to shareholders during his tenure.
XTO holds an estimated 1.1 million acres in Oklahoma and has production of 336 million cubic feet of gas a day. At one point, it had oil production of 11,000 barrels per day.
Its offices in Oklahoma are in Ardmore, Elk City, Healdton, McAlester, Ringwood and Tyrone, in addition to Oklahoma City. Its operational area takes in 26 counties.
Exxon’s purchase was originally announced in late 2009 and was completed in mid-2010. It turned out to be Tiller’s biggest acquisition while he ran Exxon and was the company’s second largest purchase in its history.
“I’m proud of the deal. I wish I’d got it for less money,” Tillerson said in Houston. “The shareholders would have been better off. ”