Fracking titanium increases with $ 6.4 billion acquisition as oil prices recover

Fracking titanium increases with $ 6.4 billion acquisition as oil prices recover

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The acquisition of ‘bolt-on’ will expand Pioneer’s already leading footprint in the Permian Basin, the largest US oil field, located in southeastern New Mexico and western Texas. This is a sign of confidence as oil prices recover from the pandemic.
“DoublePoint has built an impressive, high-quality footprint in the Midland Basin,” said the eastern part of the Perm basin, Pioneer CEO Scott Sheffield said in a statement, adding that the agreement “ours unparalleled position in the core of the Permian basin will complement. “

The agreement will give Pioneer access to approximately 97,000 contiguous net acres of mostly unground land, bringing Pioneer’s total position to more than 1 million acres.

It expects the new surface area to produce around 100,000 barrels of oil daily by the end of the second quarter.

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The deal comes as energy companies work to recover from the low oil prices last year and huge losses caused by the pandemic. Companies that have remained relatively healthy have increased mergers and acquisitions in the region as oil prices rise and the economy reopens. This is the second recent purchase by Pioneer (PXD) – in October it spent $ 4.5 billion to buy Parsley Energy.

“It is somewhat surprising to see that Pioneer announces another major acquisition so soon after the Parsley agreement, but the company may have felt that the assets simply fit too closely with their current position to succeed,” said Andrew Dittmar, senior merger and acquisition analyst. with Enverus, the data analytics firm, said in an email.

Pioneer expects the merger to help save an estimated annual cost of $ 175 million, or a total of about $ 1 billion over ten years. This is likely to enable the company to return more cash to shareholders.

Pioneer’s share closed more than 3.5% on Thursday.

The deal is expected to close in the second quarter of 2021, and includes 27.2 million Pioneer shares, $ 1 billion in cash and acceptance of approximately $ 900 million in debt and liabilities.

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