New York, United States – ExxonMobil sealed a megadeal to acquire Pioneer Natural Resources for about $60 billion, bolstering its holdings in the Permian Basin, a key US petroleum region, the companies announced Wednesday.
Under the all-stock transaction, ExxonMobil will buy Texas-based Pioneer for $59.5 billion based on ExxonMobil’s closing price on October 5. The overall transaction, including debt, is valued at around $64.5 billion, the companies said.
ExxonMobil said the takeover, the company’s biggest since the late 1990s acquisition of Mobil by Exxon, will enable greater economies of scale, permitting it to deploy drilling and operating technologies over a bigger region.
“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 Chief Executive Darren Woods.
The “highly contiguous” drilling acreage of the two companies will allow “for greater opportunities to deploy our technologies, delivering operating and capital efficiency as well as significantly increasing production,” Woods said.
The Permian Basin is located in western Texas and eastern New Mexico.
The takeover comes as oil currently trades at more than $85 a barrel, a relatively high historical benchmark.
ExxonMobil vowed that it would employ best practices on the environment, but as a longterm bet on oil and gas, the merger is unlikely to please climate activists.
While ExxonMobil usually avoids big deals under a high price scenario, analysts noted that Pioneer’s shares had retreated prior to speculation of the deal.
Another factor favoring a deal was the impending retirement of Pioneer CEO Scott Sheffield, who has planned to step down at the end of 2023.