Exxon Mobil Corp plans to buy XTO Energy Inc for about $30 billion in stock, in a move that thrusts the U.S. energy giant to the forefront of North America's fast-growing natural gas industry.

With the buy, Exxon, the largest publicly traded energy company, will become the top U.S. natural gas producer as it bets on natural gas expanding its share in the world's largest energy market.

This deal provides Exxon with some domestic momentum it didn't have, John Olson, a fund manager at Houston Energy Partners, said. They are getting a huge acreage spread, with lots of shale gas plays.

The bid, announced on Monday, spurred expectation of a wave of consolidation in the energy industry as cash-rich companies such as Exxon move to snap up smaller players with attractive assets.

There will be more of these deals, and it will make the industry more resilient to volatility in natural gas prices, said Fadel Gheit, an analyst at Oppenheimer & Co.

The deal, which is subject to XTO shareholder approval and expected to close in the second quarter, would be Exxon's biggest since it purchased Mobil Corp in 1999, and the eighth-largest ever in the energy and power sector.

Exxon will issue 0.7098 common share for each share of XTO, representing a premium of about 25 percent over XTO's closing price on Friday of $41.49.

Exxon's shares fell 4.3 percent to $69.69 on Monday, while XTO shares jumped more than 15 percent to $47.86 on the New York Stock Exchange.

The American Stock Exchange index of natural gas companies jumped nearly 5 percent, with Chesapeake Energy Corp up 5.8 percent at $24.37 and Devon Energy Corp up 4.6 percent at $66.80 on the New York Stock Exchange.

The deal is valued at $41 billion, including about $10 billion in XTO debt, and is based on the December 11 closing share prices of the two companies.

The purchase values XTO's proved reserves at about $2.93 per thousand cubic feet of gas equivalent, just over half the current NYMEX natural gas futures price.

XTO, based in Fort Worth, Texas, is one of the leading developers of unconventional resources including shale oil and gas or gas trapped in sands with low permeability that require advanced drilling techniques to recover.

These resources have emerged as a potentially huge new resource play in North America, and their development has so far been dominated by independent U.S. exploration and production companies. But now, big oil companies like Exxon are starting to look for reserves around the world.

Natural gas is expected to be the fastest growing of the major energy sources; it's going to grow at a substantially faster rate than oil or coal, Rex Tillerson, Exxon's chief executive officer, said on a call with reporters.

BIG RESERVE ADDITION

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 and is intended to complement Exxon Mobil's holdings in the United States, Canada, Germany, Poland, Hungary and Argentina, the companies said.

We're going to be able to bring their expertise to bear on many of these new plays that we've acquired, Tillerson said.

XTO has been one of the fastest-growing energy producers in the United States and it expects its production to climb 23 percent this year to about 2.87 million cfe per day.

U.S. natural gas prices have been under pressure as inventories of the fuel rose to record high levels, but prices have begun to firm in recent weeks as winter temperatures tap into those stockpiles.

The deal will not likely increase Exxon's earnings per share in the near-term and may be dilutive because of the market price for natural gas, the company said.

We'll probably suffer in the near-term as we put it together, Tillerson told analysts. This is really about value creation over the next many years.

Exxon, like other major oil companies, has struggled to increase its oil and gas reserves in recent years as state-owned energy companies held fast to the new energy discoveries.

Tillerson said the purchase would increase the company's resource base about 10 percent.

The deal will likely win antitrust approval even though the industry is relatively concentrated, said Craig Caesar, an antitrust attorney in the Dallas offices of law firm McGlinchey Stafford PLLC.

I don't anticipate that this is going to take a long time. This is simply a quick analysis of the marketplace and the competitive impact, which I think is going to be minimal, he said. Despite the magnitude and the numbers, in this industry that magnitude is not that big.

JPMorgan advised Exxon Mobil, and Barclays Capital Inc and Jefferies & Company Inc advised XTO.

(Additional reporting by Phil Wahba, Ryan Vlastelica, Ernest Scheyder, Michael Erman and Megan Davies in New York and Diane Bartz in Washington; Editing by Dave Zimmerman and Maureen Bavdek and Carol Bishopric)

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