Exxon Mobil to Acquire Pioneer Natural Resources in $59.5 Billion Deal
Exxon Mobil, the multinational oil and gas corporation, has announced a major acquisition deal with Pioneer Natural Resources. The all-stock deal, valued at a staggering $59.5 billion, is set to make Exxon the biggest producer in the largest U.S. oilfield, securing them a decade of low-cost production.
With the acquisition, Exxon aims to create a diversified energy company with the largest portfolio of high-return wells in the Permian Basin. This highly-valued area of the U.S. energy industry, known for its relatively low cost of extraction, has attracted significant attention from oil companies in recent years.
The $59.5 billion deal is valued at $253 per share, providing Pioneer with a 9% premium to its average price leading up to October 5. The acquisition is due to close in early 2024, after which Exxon would join the ranks of the four largest U.S. oil companies controlling a substantial portion of the Permian Basin.
While this deal marks a significant milestone for Exxon, CEO Darren Woods has been under scrutiny for sticking to a heavy oil-dependent strategy despite growing climate concerns. However, the company’s decision to focus on the oil sector has paid off, as Exxon reported a record profit of $56 billion last year.
Exxon’s ability to make this acquisition is a testament to its recovery from deep losses and substantial debts in recent years. The company had set aside $30 billion in cash for anticipated deals, indicating its determination to expand its operations and capitalize on the recovery of the oil and gas industry.
Antitrust experts believe that Exxon and Pioneer have a good chance of completing the deal despite potential regulatory scrutiny. This acquisition would surpass Shell’s $53 billion acquisition of BG Group in 2016, establishing Exxon as the dominant force in the global liquefied natural gas market.
Exxon’s share price has also experienced a strong recovery since early 2020, reaching an all-time high of $120 per share. The market’s positive response reflects the confidence in the company’s strategic decision-making and its potential for future growth.
With the acquisition of Pioneer Natural Resources, Exxon Mobil is solidifying its position as a leader in the U.S. oil and gas industry. This deal not only strengthens its presence in the Permian Basin but also signifies the company’s commitment to maximizing its resources and profitability in the years to come.
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