Exxon Becomes King Of Shale With Blockbuster $60 Billion Purchase Of Pioneer
Exxon Mobil Corp. is buying Pioneer Natural Resources in an all-stock transaction valued at $59.5 billion, or $253 per share, based on ExxonMobil’s closing stock price on Oct. 5. The supermajor’s largest takeover in more than two decades will make it a dominant producer of shale oil – as well as being extraordinary transformational for the US energy sector that might unleash another shale revolution.
As part of the agreement, Pioneer shareholders will receive 2.3234 shares of ExxonMobil for each Pioneer share at closing. The deal (implied total enterprise value of the transaction, including net debt, is approximately $64.5 billion), the largest since Exxon’s corporate takeover of Mobil Corp. in 1999, is also the world’s largest corporate takeover announced this year and will close in the first half of 2024.
ExxonMobil’s Permian production volume would double to 1.3 million barrels of oil equivalent per day (MOEBD), based on 2023 volumes, and could exceed 2 MOEBD in 2027. “ExxonMobil believes the transaction represents an opportunity for even greater US energy security by bringing the best technologies, operational excellence, and financial capability to an important source of domestic supply, benefitting the American economy and its consumers,” the company said.
When the deal is finalized, Exxon will be crowned ‘king shale’ in the Permian Basin of Texas and New Mexico and increase the company’s daily production to nearly 4.5 million barrels per day – more than 50% than the next largest supermajor.
“Pioneer is a clear leader in the Permian with a unique asset base and people with deep industry knowledge. The combined capabilities of our two companies will provide long-term value creation well in excess of what either company is capable of doing on a standalone basis,” said ExxonMobil Chairman and CEO Darren Woods.
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