Exxon Mobil to Acquire Pioneer Natural Resources in $59.5 Billion Deal
In a landmark move, Exxon Mobil has announced its agreement to acquire Pioneer Natural Resources in an all-stock deal valued at a staggering $59.5 billion. This acquisition positions Exxon as the largest producer in the United States’ largest oilfield, securing a decade of low-cost production for the energy giant.
Exxon CEO Darren Woods expressed his enthusiasm for the synergies that will arise from the merger, highlighting the big opportunities it presents for both companies. With the goal of adding 700,000 barrels per day of new oil and gas within four years of the deal’s closing, the merged company is set to make a significant impact on the industry.
The deal represents a 9% premium to Pioneer’s average share price for the 30 days leading up to October 5th, cementing the value and potential of this acquisition. Expected to close in early 2024, this agreement will place four of the largest U.S. oil companies in control of the Permian Basin shale field, further consolidating their dominance in the market.
As part of the acquisition, Pioneer CEO Scott Sheffield will receive an exit package of $29 million upon the sale’s closing, solidifying the benefits for both parties involved. While Exxon has not announced who will oversee its expanded shale operation, the company remains confident in its ability to navigate any potential antitrust hurdles.
The Permian Basin is highly regarded for its cost-effective oil and gas extraction methods, making it an attractive asset for Exxon to add to its portfolio. This acquisition marks Exxon’s largest since its purchase of Mobil Oil in 1998, signifying its commitment to expanding its presence in the industry.
Exxon’s recovery from a period of deep losses has been bolstered by high energy prices, allowing the company to set aside $30 billion in cash as it anticipates further strategic deals. In a previous move aimed at strengthening its low-carbon business, Exxon acquired Denbury for $4.9 billion.
The market has responded positively to Exxon’s recent performance, as its share price has rebounded from its collapse in early 2020 and recently reached an all-time high. With the acquisition of Pioneer Natural Resources, Exxon is well-positioned for continued growth and success in the energy sector.
Sources:
– “Exxon Mobil to acquire Pioneer in $59.5 billion all-stock boost to shale presence” – Fen (link to the original article on Fen)
– Additional research.
