Exxon Mobil's buying XTO. Who's next?

When Big Oil plunks down $31 billion to snatch up a natural gas company, talk naturally turns to “who’s next.”

News Monday that Exxon Mobil Corp. had reached an agreement to buy XTO Energy Inc., Colorado’s No. 6 natural gas producer, was still churning through the nation’s oil and gas industry when speculation centered on several other natural gas companies that could topple next.

Exxon said it wanted XTO’s resources and expertise in getting natural gas out of what are called “unconventional” basins because they’re harder to crack than traditional natural gas basins.

Companies being mentioned as possible acquisition targets include Canada’s EnCana Corp. (NYSE: ECA), which has its U.S. headquarters in Denver and ranked No. 3 in the state for 2008 natural gas production. EnCana split itself Nov. 30 into Cenovus Energy Inc., an integrated oil company, and EnCana Corp., a pure-play natural gas company. The company has about 850 employees in Denver and a total of 1,000 across the state.

Also being discussed is Anadarko Petroleum Corp. (NYSE: ACP), based near Houston. Anadarko is one of the largest companies working in the Denver-Julesburg (DJ) basin in Weld County. The company has 700 to 800 employees in its Denver office, plus 200 in the DJ basin.

EnCana’s stock has risen about 10 percent since Dec. 11, the last trading day before the Exxon-XTO news.

Doug Hock, EnCana’s Denver-based spokesman, was unmoved by the “Buy It Now” tag that speculators have attached to the company.

“Given the fact that we’re the largest natural gas company in North America, and that we just split the company so we’re a pure-play natural gas company, yes, we’re on the list,” Hock said. “It’s not surprising.”

Hock was calling from Pennsylvania, where EnCana is introducing itself this week to the citizens of Luzerne County in the Wilkes-Barre area. On Dec. 10, EnCana closed a deal creating a joint venture with private, Denver-based Whitmar Exploration Co. for 25,000 acres of mineral rights in the area, Hock said.

The area is part of the Marcellus Shale basin, one of the hopping new natural gas basins in the East that are drawing lots of interest and investment from the natural gas industry. In April 2009 a U.S. Department of Energy report estimated the Marcellus Shale basin might have 262 trillion cubic feet of “technically recoverable” natural gas — more than 10 times as much gas as was used throughout the entire United States in 2008.

“No one has really drilled in this area,” Hock said. “We’re the first in the county, although there’s a lot of activity going on around them.”

Hock declined to disclose terms of the deal, but said the mineral rights were leased from between 850 and 875 landowners. EnCana is the operating partner and has a 75 percent interest in the joint venture, he said.

The company plans to drill two test wells in 2010 and if things go well, more could follow, Hock said.

“Colorado is important to us, but it’s one part of our portfolio,” he said. “We have a lot of different assets.”

For its part, Anadarko has announced eight resource discoveries this year in some of the hottest plays in the world, including the Gulf of Mexico and West Africa, company spokesman John Christiansen said.

“When people talk about you, then it means that you’re doing something right,” he said.