Exxon Mobil to acquire Pioneer

ExxonMobil has announced its plans to acquire Pioneer in an all-stock transaction valued at $59.5 billion, or $253 per share. According to a press release by Exxon Mobil, Pioneer shareholders will receive 2.3234 shares of ExxonMobil for each Pioneer share at closing.

"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 U.S. unconventional inventory position," stated Exxon Mobil.

The implied total enterprise value of the transaction, including net debt, is approximately $64.5 billion, ExxonMobil revealed. Upon closing, the combined entity is projected to have roughly 16 billion barrels of oil equivalent in the Permian region. This merger will double ExxonMobil's Permian production from 1.3 million barrels of oil equivalent per day in 2023 to 2 by 2027.

ExxonMobil Chairman and CEO Darren Woods expressed his optimism about the merger, stating, "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. Their tier-one acreage is highly contiguous, allowing for greater opportunities to deploy our technologies, delivering operating and capital efficiency as well as significantly increasing production."

Woods also highlighted the environmental benefits of the merger, stating, "As importantly, as we look to combine our companies, we bring together environmental best-practices that will lower our environmental footprint and plan to accelerate Pioneer’s net-zero plan from 2050 to 2035."

Pioneer CEO Scott Sheffield expressed excitement about the merger, stating, "The combination of ExxonMobil and Pioneer creates a diversified energy company with the largest footprint of high-return wells in the Permian Basin. 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 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."

The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to be completed in early 2022.