NEW YORK (CNNMoney.com) -- Exxon Mobil is sitting on a massive pile of money.

Thanks to record oil prices over the last few years and a cautious investment strategy that drew fire from critics, the company has nearly $40 billion in cash reserves. It has another $225 billion in repurchased stock tucked away for a rainy day.

That's enough money to pay a nearly 60% premium, in cash, for every share of its next largest competitor - Royal Dutch Shell (RDSA).

Some analysts think it may do something just like that.

"It's not if, it's when and which [company]," said Fadel Gheit, a senior energy analyst at the investment bank Oppenheimer.

Gheit is in the minority of oil analysts, but he's still convinced Exxon's target will be one of the big oil firms.

"When Exxon came calling last time, they didn't dial the little guys," he said, referring to the 1999 takeover of Mobil, then the country's second-largest oil company. "It has to be a big one in order to move the needle."

Exxon management: Tough as nails

Shrewd management has put Exxon (XOM, Fortune 500) in this position to buy.

Over the last five years oil companies worldwide have scrambled to develop new projects to take advantage of oil's rising price - often paying exorbitant sums for leases, drilling rigs and other assets needed to bring crude to market.

But not Exxon. Although criticized for not doing enough to pump more crude, the company has maintained the price spike was temporary, and that it wouldn't overpay for projects.

The position has paid off. With crude prices crashing, many oil firms are now deep in debt and stuck with expensive projects.

Share prices of the majors have fallen in line with the broader stock market.

Shell is down 35% in the last 6 months. Chevron (CVX, Fortune 500) and BP (BP) are off about 30%.

Shares in many other oil firms that rushed to expand over the last few years are down even more.

But Exxon has lost just 10%.

"It's hard to question their management style and expertise," said Ken Carol, an oil company analyst at the investment bank Johnson Rice & Co. "They've been proven absolutely correct."

For Exxon, taking over another big firm would give it much-needed oil reserves in a time when the multinational oil companies find themselves increasingly locked out of the best new oil plays by national firms like Russian's Gazprom, Saudi Arabia's Aramco or Venezuela's PDVSA.

It would also give it more financial muscle when negotiating with these governments.

Is Shell in Exxon's sights?

A deal with Shell might be particularly sweet for Exxon's ego.

The two firms have been archrivals since the early days of the oil barons, with the Anglo-Dutch Shell and John D. Rockefeller's Standard Oil, which spawned Exxon, going head to head in markets around the globe.

Competition and price wars were fierce, and several times during the late 1800s and early 1900s men in gray suits crossed the Atlantic looking to strike a deal between the world's two giant firms - to no avail.

But Carol, like most other oil analysts, doesn't think Exxon will go for one of the big players.

"Never say never, but that's not their history," he said. "They tend to be very conservative."

A more cautious approach would be to buy one of the smaller independent companies.

Gheit said if Exxon doesn't go for a major company, firms with lots of debt could make good targets.

Those include XTO (XTO, Fortune 500), Chesapeake (CHK, Fortune 500), Anadarko (APC, Fortune 500) and Pioneer (PXD), according to their balance sheets.

A smaller firm would give Exxon more of a specialty in a particular area - like oil production in the case of Anadarko or natural gas in the case of XTO - rather than mimic the capabilities, and liabilities, they already have as an integrated firm.

"Ultimately, Exxon will do something with this money," said Blake Fernandez, an integrated oil analyst at the New Orleans-based investment bank Howard Weil. "But why would they buy someone with the same growth problems they've got?"

An even safer option would be to buy leases from distressed companies looking to raise cash, or to develop leases it already has. The company may also find some bargains overseas, as declining oil prices may spur foreign governments to make more leases available.

Exxon itself has certainly left the door wide open to doing any or all of the above.

"We're watching the valuations of a broad range of companies, just as we've done all the time," Exxon boss Rex Tillerson told reporters at a recent industry gathering. "Just have to wait and see."

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