Doble Besos? Maybe. Maybe not.
XOM. Huge. Rich beyond belief in reserves, cash, holdings, political power, and technical and corporate knowledge of the world's energy business. Strengths are in what I like to call classical engineering... how to drill in the deepest water. The hottest salt. The most inhospitable natural environments. This is where XOM shines. Incredible technical professionals that successfully take on the big, complex, involved "point projects" that cause us mortals to quiver in fear. Where does XOM fail? Hubris. Borrowing from the left wing playbook, The US of A of Oil Companies, as it were. We are the best and we have nothing to learn from anyone else. Our way is the best way. And who can argue? They are the biggest and baddest for sure. Heavy handed and bureaucratic as an organization, sometimes beyond belief. XOM uses lawyers for PR, for God's sake! XOM is facing a growing problem in royalty relations here in the US, basically because it doesn't really do onshore US other than caretaking historical properties, and when you caretake, the name of the game is cost reduction.
XTO. A pure dee independent. Aggressive. Good at acquiring AND drilling. NOT a "point project" company but a company that makes its hay drilling lots of wells and keeping costs down all while trying to experiment increasing incremental reserves. A company with a great reputation in royalty relations because they make their dollars in the good ol' US of A and clearly understand that it is important that you don't crap where you eat.
My sources tell me that XOM recognizes it needs XTO's Unconventional Expertise in order to exploit its substantive unconventional holdings wordwide, particularly in Central and Eastern Europe. The best of all worlds would have XOM maintain XTO for its US onshore operations and global unconventional work, and doing its best to retain the "independent" spirit that XTO has and that bled its last drop from XOM we know today sometime in the 1950's. If XOM can do that, it will have hot a home run beyond anyones wildest expectations.
Or, XOM can integrate XTO's assets into the Borg, crush its can-do spirit and chase its immensely talented unconventional drilling and reservoir folks into the salivating hands of the dozens of private equity groups waiting to give these talented folks a piece of the pie to create the next XTO.
As usual, the choice is XOM's. In a perfect world, a wise XOM management would adopt the Archer Daniels Midland approach and support the Independent Producer as a straw man in order to keep domestic industry from being crushed. In the old XOM playbook, they could create a PR nightmare that the rest of us pay the price for ala Valdez. I wish them the best of luck, and wisdom in crafting their strategy...