Sometimes, courtship is better the second time around. After some previous rumors and flirting with a deal in the spring of 2023, ExxonMobil, the largest international integrated oil company, reached an agreement to acquire Pioneer Natural Resources, the largest pure-play Permian producer, for $64.5 billion, the largest-ever U.S. upstream transaction. In today’s blog, we analyze the deal that would make ExxonMobil the top Permian producer, including shifts in the focus and depth of its upstream portfolio, the integration with its existing midstream and downstream infrastructure, and its energy transition goals.
Canadian crude output is rising, requiring new export routes. As traditional pathways face constraints, the U.S. Rockies—especially the Guernsey, WY hub—are emerging as key corridors for moving Canadian heavy crude to downstream markets, including the Gulf Coast.
First, let’s look at the headline metrics of this historic transaction. The major integrated oil producer has agreed to acquire Pioneer Natural Resources (PXD) in an all-stock transaction valued at $253 per Pioneer share based on ExxonMobil’s closing price on October 5, an 18% premium to PXD’s closing price on the same date. The total value is $64.5 billion, including assumption of net debt, nearly $8 billion higher than Occidental Petroleum’s $57 billion 2019 acquisition of Anadarko Petroleum. More impressively, the equity portion of ExxonMobil’s purchase is $59 billion, $21 billion higher than the $38 billion Oxy paid for Anadarko’s equity. Pioneer’s Q2 2023 production of 711 Mboe/d more than doubles ExxonMobil’s current output of 600 Mboe/d for a combined production of 1.3 MMboe/d, vaulting the buyer into the position of top Permian producer. As shown in Figure 1, Pioneer’s 850,000 net acres in the Midland Basin (pink-shaded areas) are highly contiguous to ExxonMobil’s current Midland acreage (blue-shaded areas), which the buyer estimates will generate average annual synergies of $2 billion over the next decade. Combined production is expected to reach 2 MMboe/d in 2027 from a resource base of 16 billion barrels of oil equivalent (boe) that provides 15-20 years of remaining inventory. The transaction, which is expected to close in the first half of 2024, will be immediately accretive to ExxonMobil’s earnings per share, operating cash flow, and free cash flow and will enhance shareholder capital returns.
Figure 1. ExxonMobil and Pioneer Acreage in the Permian. Source: RBN
Join Backstage Pass to Read Full Article
About the song
“Take Me to the Top” was written by Nikki Sixx and appears as the third song on side one of Motley Crue’s debut studio album, Too Fast for Love. A video for the song, featuring vintage live footage of Motley Crue, was released in March 2019 in conjunction with the release of the band’s autobiographical movie, The Dirt, along with the soundtrack album of the film. Personnel on the record were: Vince Neal (lead vocals), Mick Mars (guitars, backing vocals), Nikki Sixx (bass), and Tommy Lee (drums, backing vocals).
Too Fast for Love was first released in November 1981 on the band’s label, Leathur Records, financed by their original manager, Allan Coffman. Only 900 copies of the album were released on Leathur Records. It was recorded during October 1981 at Hit City West in Hollywood with Avi Kipper engineering and the band producing. Elektra Records signed the band the following year, re-recording and re-mixing some of the album with Michael Wagener mixing and Roy Thomas Baker overseeing the project. Released by Elektra in August 1982, the album went to #77 on the Billboard 200 Albums chart. It has been certified Platinum by the Recording Industry Association of America. Two singles were released from the LP.
Motley Crue is an American heavy metal band formed in Hollywood in 1981. The main lineup of Vince Neal, Nikki Sixx, Mick Mars and Tommy Lee have sold over 100 million records worldwide. They have released nine studio albums, three live albums, eight compilation albums, three EPs, and 30 singles. They have won one American Music Award and have a star on the Hollywood Walk of Fame. Eight members have passed through the group since its inception. In 2022 Mick Mars announced his retirement from touring with the band. Guitarist John 5 has taken Mars’ place for live duties. The band still performs live and is currently on a world tour with Def Leppard.
