Exxon set to buy shale rival Pioneer for $60 billion in stock -sources
Exxon Mobil, the renowned energy giant, is poised to make a groundbreaking move that could reshape the U.S. oil industry. According to insiders familiar with the matter, the company is expected to announce its acquisition of U.S. rival Pioneer Natural Resources in a deal worth approximately $60 billion. This strategic move will position Exxon as the leading player in the largest U.S. oilfield, securing a decade of low-cost production.
The deal, which is anticipated to be a pure stock offer valued at over $250 a share for Pioneer, marks Exxon’s most significant acquisition since its monumental $81 billion purchase of Mobil Oil in 1998. With Exxon’s market value at $442 billion, this acquisition is set to be the largest of its kind this year.
While Exxon and Pioneer have refrained from commenting on the speculation, the potential acquisition is expected to face scrutiny from antitrust regulators due to its implications for the U.S. shale industry. If approved, the deal would consolidate the control of four major U.S. oil companies over the Permian Basin shale field and its extensive oilfield infrastructure.
Exxon’s decision to pursue this acquisition comes after a period of strategic restructuring, during which the company successfully navigated deep losses and significant debts. By slashing costs, divesting assets, and capitalizing on high energy prices, Exxon rebounded from a challenging period and achieved a record-breaking $56 billion profit last year. This remarkable turnaround was made possible by CEO Darren Woods’ steadfast commitment to a heavy oil-dependent strategy, despite mounting pressure to embrace renewable energy alternatives.
The acquisition of Pioneer aligns with Exxon’s long-term vision and its dedication to capitalizing on the Permian Basin’s immense potential. Pioneer, one of the most successful oil companies to emerge from the shale revolution, has established itself as the third-largest oil producer in the Permian basin. With rock-bottom production costs averaging around $10.50 per barrel of oil and gas, Pioneer’s expertise and assets will undoubtedly bolster Exxon’s position in the industry.
This move by Exxon not only solidifies its dominance in the U.S. oil market but also showcases the company’s commitment to maximizing its potential for growth and profitability. By capitalizing on Pioneer’s success and expertise, Exxon is poised to further strengthen its position as a global energy leader.
It is worth noting that Exxon’s recent acquisition strategy extends beyond traditional oil and gas assets. In July, the company agreed to a $4.9 billion all-stock deal for Denbury Inc., a small U.S. oil firm specializing in carbon dioxide pipelines and underground storage. This acquisition aimed to bolster Exxon’s nascent low-carbon business, demonstrating the company’s forward-thinking approach to a changing energy landscape.
Exxon’s resilience and strategic decision-making have not gone unnoticed by investors. The company’s share price has experienced a remarkable recovery, reaching an all-time high of $120 per share after a tumultuous period in early 2020 when oil and gas prices plummeted.
As Exxon Mobil prepares to make this historic acquisition, the energy industry eagerly awaits the official announcement. If successful, this deal will undoubtedly reshape the U.S. oil landscape, solidifying Exxon’s position as a formidable force in the industry and setting the stage for continued growth and success.