Driller boosts assets in West Texas
In a $6.4B deal, Pioneer buys another rival
Pioneer Natural Resources plans to acquire Doublepoint Energy in a cash-andstock deal worth $6.4 billion, including debt.
The Dallas independent driller said it will pay 27.2 million shares of Pioneer common stock, $1 billion and take on about $900 million of Doublepoint debt to acquire the Fort Worth oil and gas company. The transaction is expected to close in the second quarter.
“Doublepoint has amassed an impressive, high-quality footprint in the Midland Basin, composed of tier-one acreage adjacent to Pioneer’s leading position,” Pioneer CEO Scott Sheffield said in a statement. “We are pleased with their decision to become long-term partners with Pioneer in a transaction that will complement our unmatched position in the core of the Permian Basin.”
The deal is the largest acquisition of a private U.S. exploration and production company since 2011 and one of the largest private E&P acquisitions of the past 20 years, Austin energy research company Enverus said. Four months ago, Pioneer acquired rival Parsley Energy for $7.6 billion, bringing to $14 billion the amount Pioneer has spent to strengthen its position in the Permian Basin of West Texas and eastern New Mexico.
Pioneer has been the most active deal-maker among production companies since the COVID-19 downturn, Enverus said.
“It is somewhat surprising to see Pioneer announce another major acquisition so soon after the Parsley deal, but the company may have felt the assets are simply too close a fit with their existing posi
tion to pass up,” Enverus senior analyst Andrew Dittmar said in a statement.
Pioneer’s acquisition of Doublepoint is the latest in a wave of consolidation sweeping the energy industry during the oil bust. Companies are merging in the hope that combined operations can help them weather downturns.
Recent deals include Conocophillip’s $9.7 billion takeover of Concho Resources, Devon Energy’s acquisition of WPX Energy for nearly $2.6 billion and Noble Corp.’s pending purchase of Pacific Drilling in an all-stock deal.
Pioneer said its acquisition of Doublepoint is expected to save the combined company about $175 million annually through operational efficiencies
and cost-cutting.
Upon closing, Pioneer will acquire 97,000 net acres close to its existing Permian operations, which will add 100,000 barrels of oil and gas production by the middle of the year, the company said. The new land, which is largely untapped, will increase Pioneer’s Permian position to more than 1 million net acres with no exposure to federal lands. The Biden administration has imposed a one-year moratorium on new oil and gas drilling leases on federal lands and waters.
Pioneer shareholders will own about 89 percent of the combined company when the deal is wrapped up, while Doublepoint shareholders will own the remaining 11 percent. Pioneer said it plans to finance the cash portion of the transaction with cash and borrowing on its credit line.