ExxonMobil Corp. (NYSE:XOM), betting that demand for natural gas in the U.S. will grow, has struck a $31 billion all-stock deal to gain control of XTO Energy, Inc (NYSE:XTO).

The deal is a “timely investment” in natural gas to meet long-term global energy demand growth, the company’s chief executive officer Rex Tillerson said in a released statement today.

XTO shares, were up 15 percent to $47.73 in mid-day trading on the New York Stock Exchange. Shares of ExxonMobil fell 4.3 percent to $69.70.

Exxon will issue 0.7098 common shares for each common share of XTO Energy, Inc., a 25 percent premium to XTO stockholders. The transaction includes $10 billion of existing XTO debt.

Energy