Exxon Mobil will acquire Pioneer Natural Resources as part of an all-stock transaction valued at $59.5 billion, according to a joint statement Wednesday, the largest deal by the oil giant since an estimated $80 billion merger between Exxon and Mobil in the late 1990s, as it looks to expand its gas production in Texas.
Exxon will purchase Pioneer in a deal that values the company at $253 per share, netting Pioneer shareholders just over 2.32 shares of ExxonMobil for each Pioneer share at the deal’s closing, according to a joint statement.
Exxon will acquire Pioneer’s more than 850,000 net acres in the Permian Basin in West Texas, “more than doubling” Exxon’s output in a region that accounted for 18% of all U.S. natural gas production in 2022, according to the Energy Information Administration.
Shares for Pioneer rose just over 1% to $240.50 in the first five minutes of trading on Wednesday morning while shares for Exxon fell about 0.4% to $110.45.
The transaction is expected to close in the first half of 2024, both companies said, pending regulatory approval and approval by Pioneer’s shareholders.
Scott Hanold, an analyst for RBC Capital Markets, said approval by the Federal Trade Commission was likely, according to Reuters, arguing “the market share of this combination appears to be under thresholds typically warranting action.”
16 billion. That’s the estimated number of barrels of oil equivalent that Exxon will hold in the Permian Basin as part of the deal.
The acquisition would be the largest deal in the energy sector over the last eight years, according to Reuters, beating out Shell’s $53 billion acquisition of BG Group in 2016.
Exxon Mobil and Pioneer entered preliminary talks for a possible merger in April, according to the Wall Street Journal, as Exxon worked to expand its production in West Texas. U.S. oil and gas production is near all-time highs, but it has become more difficult for oil companies to acquire new locations for drilling in recent years as growth slows, and expanding oil production has proven expensive and challenging. The deal follows Exxon’s $4.9 billion acquisition of Denbury—a Texas-based firm that operates carbon dioxide pipelines—earlier this year. Exxon recorded $56 billion in profit in 2022, the largest annual gain ever recorded by a Western oil company. The White House condemned the milestone as “outrageous,” suggesting the firm profited as consumers suffered from increased oil prices.
Exxon Mobil Closing In On Megadeal With Shale Driller Pioneer (Wall Street Journal)
Exxon Mobil Buys Pioneer Natural In $59.5 Billion Deal With Energy Prices Surging (Associated Press)
