ExxonMobil, the world's largest publicly-traded company, is acquiring XTO Energy Inc., the largest independent gas producer from shale fields in the US, in an all-stock transaction valued at $41 billion, including $10 billion of existing XTO debt.

The transaction is based on the closing share prices of ExxonMobil and XTO on 11 December 2009.

In making its first acquisition since 2006 and its largest since the merger of Exxon and Mobil, the Irving, Texas-based ExxonMobil, will be profiting from green technology as well as increase its resource base by about 10 per cent.

Under the terms of the agreement signed yesterday, ExxonMobil has agreed to issue 0.7098 common shares for each common share of XTO, representing premium of 25 per cent to XTO stockholders.

XTO is a domestic oil and natural gas producer engaged in upstream oil and gas development in the US. Its properties are concentrated in Texas, New Mexico, North Dakota, Pennsylvania, West Virginia, Arkansas, Oklahoma, Kansas, Wyoming, Colorado, Utah, Louisiana and Montana.

With 2008 net income of $1.9 billion on revenues of $7.6 billion, the Fort Worth-based, XTO Energy has grown since inception in 1986 to one of the country's largest independent oil and gas producer having a domestic reserve base of more than 2.06 billion barrels of oil equivalent.

XTO Energy specialises in extracting natural gas from unconventional sources such as shale rock. Tapping gas from such formations has sparked a boom in the domestic US gas output, boosting the country's reserve and has seen the company's stock price increasing 4600 per cent since 1993.

''We are pleased that ExxonMobil and XTO have reached this agreement,'' said Rex Tillerson, chairman and chief executive officer of Exxon Mobil Corporation.

''XTO is a leading US unconventional natural gas producer, with an outstanding resource base, strong technical expertise and highly skilled employees. XTO's strengths, together with ExxonMobil's advanced R&D and operational capabilities, global scale and financial capacity, should enable development of additional supplies of unconventional oil and gas resources, benefiting consumers both here in the United States and around the world.''

Bob Simpson, chairman and founder of XTO, ranked 23rd in Forbes CEO compensation list, with an annual compensation package of $53.5 million said, "XTO has a proven ability to profitably and consistently grow production and reserves in unconventional resources."

Tillerson said the agreement is good news for the US economy and energy security, as it will enhance opportunities for job creation and investment in the production of America's own clean-burning natural gas resources.

XTO's resource base is the equivalent of 45 trillion cubic feet of gas and includes shale gas, tight gas, coal bed methane and shale oil. These will complement ExxonMobil's holdings in the US, Canada, Germany, Poland, Hungary and Argentina.

After completing the acquisition, ExxonMobil plans to establish a new upstream organisation to manage global development and production of unconventional resources, enabling the rapid development and deployment of technologies and operating practices to increase production and maximize resource value.

The new organisation will be located in Fort Worth, Texas, in XTO's current offices, said ExxonMobil.

Tillerson said the agreement is part of an ongoing, disciplined evaluation of timely investment opportunities to create value for shareholders, and to help meet long-term global energy demand growth. The agreement is consistent with ExxonMobil's business model which is focused on sustainable, long-term value creation.

ExxonMobil expects to complete the transaction in the second quarter of 2010.