By Jim Polson. Bloomberg Business Week. January 21, 2010.
Exxon Mobil Corp., XTO Energy Inc. and other shale-gas producers probably won’t face U.S. rules that would add costs of $100,000 a well, given comments at a Congressional hearing yesterday and the loss of a Senate seat by majority Democrats, FBR Capital Markets Corp. analysts said.
Irving, Texas-based Exxon’s $30 billion acquisition of XTO isn’t in jeopardy, Benjamin Salisbury and other FBR analysts wrote in a report to clients today. U.S. laws making shale development “illegal or commercially impracticable” would let Exxon terminate the deal without penalty, under the buyout agreement.
Democrats at the hearing praised the economic and environmental benefits of replacing fuels such as coal with cleaner-burning natural gas, indicating the party will emphasize jobs and the economy rather than restrictions on fracturing petroleum-bearing rock that might curb drilling by as much as 20 percent, the analysts wrote. Environmentalists said chemicals in fracturing fluid contaminate drinking water.