Exxon Mobil Corporation (NYSE:XOM) has confirmed the acquisition of Pioneer Natural Resources (NYSE:PXD) in a $59.5 billion deal that it said would transform its upstream business.
The all-stock transaction values each Pioneer share at $253 and more than doubles Exxon's Permian footprint, the vast field in western Texas and New Mexico that has helped turn the US into the world’s largest oil and gas producer.
Pioneer shareholders will receive 2.3234 shares of ExxonMobil for each Pioneer share at closing with an implied total enterprise value, including net debt, of $64.5 billion.
Exxon said the deal is expected to generate double-digit returns by recovering more resource, more efficiently and with a lower environmental impact.
It combines Pioneer’s sizeable acreage, entrepreneurial culture and deep industry expertise with ExxonMobil’s balance-sheet strength, advanced technologies and industry-leading project development capabilities.
“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.
“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 added.
ExxonMobil said the deal is anticipated to be accretive immediately and highly accretive mid- to long-term to its earnings per share and free cash flow, with a long cash flow runway.
ExxonMobil’s strong balance sheet combined with Pioneer’s added surplus free cash flow provides upside opportunity to enhance shareholder capital returns post-closing, it added.