According to sources, Exxon is planning to acquire shale competitor Pioneer for $60 billion in stocks.

NEW YORK/HOUSTON – 

According to sources familiar with the situation, Exxon Mobil is set to announce its acquisition of American competitor Pioneer Natural Resources for approximately $60 billion on Wednesday. This transaction will give Exxon Mobil control of the largest oilfield in the United States and ensure a decade of cost-effective production.

Anonymous sources have revealed that Exxon, currently worth $442 billion, is planning to present a stock deal worth over $250 per share to Pioneer. The information is not yet public.

Pioneer shares closed at $237.41 on Tuesday, having risen 11% since the first reports of a deal surfaced last Thursday.

This would be the biggest purchase made by any company this year and Exxon’s largest since buying Mobil Oil for $81 billion in 1998.

Exxon did not provide a response regarding “market rumors,” and Pioneer has not yet responded to a comment request..

The acquisition may undergo strict examination from antitrust authorities due to the fact that it positions Exxon as the leading producer of US shale in terms of volume. This agreement will result in four major oil companies holding significant control over the Permian Basin shale field and its vast oilfield infrastructure.

In the past two years, Exxon has managed to recover from significant financial losses and sizable debts. This was achieved through reducing expenses, offloading numerous assets, and taking advantage of the increased energy prices caused by Russia’s annexation of Ukraine.

CEO Darren Woods has refused to give in to pressure from investors and politicians to change course and adopt renewable energy, a move that several European oil companies have already made. He has faced significant backlash for maintaining a strategy heavily reliant on oil, despite growing concerns about climate change.

The company’s decision proved successful as they made a record profit of $56 billion last year, following two years of losses totaling $22 billion due to the effects of the COVID-19 pandemic.

Analysts report that Exxon saved approximately $30 billion in cash during the surge in oil prices, setting it aside for potential deals.

Pioneer has emerged as one of the top-performing oil companies during the shale revolution., 
In just over ten years, this caused the U.S. to transform from a significant oil importer into the top producer in the world.

This company ranks as the third largest supplier of oil in the Permian basin, behind Chevron Corp and ConocoPhillips. Their production costs are incredibly low, averaging at around $10.50 per barrel for oil and gas.

During the leadership of CEO Scott Sheffield, the oil company expanded by making quick acquisitions, such as the recent billion-dollar transactions for DoublePoint Energy and Parsley Energy in 2021.

Exxon’s planned purchase would outrank oil major Shell’s $53 billion acquisition of BG Group in 2016, which put it atop the global liquefied natural gas market.

Earlier on Tuesday, Bloomberg News announced the cost of the agreement.

In July, Exxon made a deal worth $4.9 billion with Denbury Inc., a small American oil company that has a system of pipelines and storage for carbon dioxide. The purpose of this acquisition was to strengthen Exxon’s developing low-carbon business.

The biggest oil company in the United States initially offered to acquire Denbury with a full cash offer. However, at the eleventh hour, they changed their proposal to an all-stock deal. This decision was influenced by the target company’s increase in market value during negotiations and investors’ desire to benefit from any potential growth in Exxon’s stock.

The stock value of the major oil company has bounced back significantly from its decline in early 2020, when oil and gas prices plummeted to around $30. Most recently, Exxon’s shares reached a record high of $120 per share.