Oil producer Pioneer will acquire rival DoublePoint for $ 6.4 billion
Pioneer Natural Resources, one of the largest independent oil operators in the U.S., is buying rival Texan producer DoublePoint Energy for $ 6.4 billion in cash and shares as it manages to consolidate the country’s shredded shale patch.
Pioneer said Friday that the purchase will give it a “unique” scale in the Permian Basin in Texas, the world’s most prosperous oil-producing region.
In support of the private event DoublePoint, Donald Trump took over the presidency visit Texas last July, it was one of the Permian producers that increased production as a result of last year’s fall in prices, which briefly left U.S. oil prices below zero.
Pioneer said that although the Permian footprint is spreading rapidly, he will stick to his plan to achieve modest output growth.
“Pioneer will incorporate these assets into our investment model, migrating assets from significant production growth to a free cash flow model, moderating growth in the U.S. shale industry and creating significant value for our shareholders,” said Pioneer CEO Scott Sheffield.
In January, Pioneer a parsley Energy treatment, Another major Permian producer, in a $ 7.6 billion purchase caused the Sheffield company to merge with his son, Bryan Sheffield.
Last year’s oil price crash caused many failures in the shale patch, a sharp drop in production and a wave of mergers and acquisitions. According to data provider Enverus, a further $ 50 billion deal was reached in the second half of 2020.
In an attempt to recover investors who have fled the sector in recent years, shale operators have done so he committed the era of debt-induced drilling and negative cash flows has come to an end, with a focus on slow production growth and high profitability.
DoublePoint, Quantum Energy Partners and Apollo Global Management, were sponsored by private equity groups among the unlisted Permians producers who are able to deal with this trend last year and increase production.
Pioneer, which produced 370,000 barrels a day of oil and gas by 2020, said DoublePoint production would reach 100,000 b / d by the end of June.
Pioneer’s bid was taken on 27 million shares, $ 1 billion in cash and $ 900 million in debt. The costs of the deal would save $ 10 billion over 10 years.
Pioneer said the agreement will allow for an increase in the variable dividend paid to shareholders from 2022 onwards.