ExxonMobil to Buy Pioneer for $59.5 Billion

ExxonMobil will acquire rival Pioneer Natural Resources for $59.5 billion, which will make it the biggest producer in the largest US oilfield, securing a decade of low-cost production. 

The deal, enhancing the oil giant's presence in the lucrative Permian Basin, combines the largest US oil company with one of the most successful names to emerge from the shale revolution that turned the US into the world's largest oil producer in little more than a decade.

ExxonMobil expects to generate double-digit returns by recovering more resource, more efficiently and with a lower environmental impact.

The merger combines Pioneer’s sizeable acreage, entrepreneurial culture, and deep industry expertise with ExxonMobil’s balance-sheet strength, advanced technologies, and industry-leading project development capabilities.

The merger combines Pioneer’s more than 850,000 net acres in the Midland Basin with ExxonMobil’s 570,000 net acres in the Delaware and Midland Basins, creating the industry’s leading high-quality undeveloped US unconventional inventory position. Together, the companies will have an estimated 16 billion barrels of oil equivalent resource in the Permian.

ExxonMobil believes the transaction represents an opportunity for even greater US energy security by bringing the best technologies, operational excellence and financial capability to an important source of domestic supply, benefitting the American economy and its consumers.

“Pioneer is a clear leader in the Permian with a unique asset base and people with deep industry knowledge. The combined capabilities of our two companies will provide long-term value creation well in excess of what either company is capable of doing on a standalone basis,” said ExxonMobil Chairman and CEO Darren Woods. “Their tier-one acreage is highly contiguous, allowing for greater opportunities to deploy our technologies, delivering operating and capital efficiency as well as significantly increasing production. As importantly, as we look to combine our companies, we bring together environmental best-practices that will lower our environmental footprint and plan to accelerate Pioneer’s net-zero plan from 2050 to 2035."

The complementary fit of Pioneer’s contiguous acreage will allow ExxonMobil to drill long, best-in-class laterals — up to four miles — which will result in fewer wells and a smaller surface footprint. The company also expects to enhance field digitalization and automation that will optimize production throughput and cost. 

The combination of ExxonMobil and Pioneer creates a diversified energy company with the largest footprint of high-return wells in the Permian Basin. As part of a global enterprise, Pioneer, our shareholders and our employees will be better positioned for long-term success through a size and scale that spans the globe and offers diversity through product and exposure to the full energy value chain," said Pioneer Chief Executive Officer Scott Sheffield. “The consolidated company will maintain its leadership position, driving further efficiencies through the combination of our adjacent, contiguous acreage in the Midland Basin and our highly talented employee base, with the improved ability to deliver durable returns, creating tangible value for shareholders for decades to come.”