BY Fraser Tennant
In what is the largest acquisition announced in 2023 so far, US multinational oil and gas company Exxon Mobil Corporation is to acquire independent oil and gas exploration and production firm Pioneer Natural Resources in a transaction valued at $59.5bn.
Under the terms of the definitive agreement, Pioneer shareholders will receive 2.3234 shares of ExxonMobil for each Pioneer share at closing. The transaction is expected to close in the first half of 2024.
The merger combines Pioneer’s more than 850,000 net acres in the Midland Basin with ExxonMobil’s 570,000 net acres in the Delaware and Midland Basins, creating the industry’s leading high-quality undeveloped US unconventional inventory position. Together, the companies will have an estimated 16 billion barrels of oil equivalent resource in the Permian.
“Pioneer is a clear leader in the Permian with a unique asset base and people with deep industry knowledge,” said Darren Woods, chairman and chief executive of ExxonMobil. “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.”
Additionally, the merger represents the opportunity for even greater US energy security by bringing the best technology, operational excellence, environmental best practices and financial capability to an important source of domestic supply, benefitting the American economy and its consumers.
“The combination of ExxonMobil and Pioneer creates a diversified energy company with the largest footprint of high-return wells in the Permian Basin,” said Scott Sheffield, chief executive of Pioneer. “As part of a global enterprise, Pioneer, our shareholders and our employees will be better positioned for long-term success through a size and scale that spans the globe and offers diversity through product and exposure to the full energy value chain.”
The transaction has been unanimously approved by the boards of directors of both companies, which is subject to customary regulatory reviews and approvals. It is also subject to approval by Pioneer shareholders.
Mr Sheffield concluded: “The consolidated company will maintain its leadership position, driving further efficiencies through the combination of our adjacent, contiguous acreage in the Midland Basin and our highly talented employee base, with the improved ability to deliver durable returns, creating tangible value for shareholders for decades to come.”
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