Pioneer Natural Resources to acquire DoublePoint Energy for $6.4bn
Pioneer Natural Resources acquisition of DoublePoint Energy : Pioneer Natural Resources Company has signed a stock-cum-cash deal worth around $6.4 billion to acquire DoublePoint Energy, a rival upstream oil and gas company based in Texas.
The consideration is made up of nearly 27.2 million shares of Pioneer Natural Resources and $1 billion of cash. It also includes the assumption of DoublePoint Energy’s debt and liabilities of about $900 million.
DoublePoint Energy is active in the Midland Basin in Texas, where it has a multi-rig horizontal development program. As of September 2020, the company had drilled more than 170 horizontal wells.
The company was founded in 2018 as a pure-play Midland Basin company by Double Eagle Energy Holdings III and FourPoint Energy. It is supported by equity commitments from Apollo Global Management, Magnetar Capital, Quantum Energy Partners, and GSO Capital Partners.
Pioneer Natural Resources said that the acquisition represents a contiguous position of around 97,000 net acres, which directly offsets and overlaps its existing footprint.
The oil and gas producer in the Permian Basin said that the acreage to be acquired is mainly undrilled and augments its asset base, increasing its acreage position to more than a million net acres with no exposure to lands owned by the US government.
Pioneer Natural Resources anticipates production from the acquired assets to yield around 100,000 barrels of oil equivalent per day by late Q2 2021.
Pioneer Natural Resources acquisition of DoublePoint Energy. Photo courtesy of John R Perry from Pixabay.
Comments on Pioneer Natural Resources acquisition of DoublePoint Energy
Scott D. Sheffield – CEO of Pioneer Natural Resources, commenting on Pioneer Natural Resources acquisition of DoublePoint Energy, said: “DoublePoint has amassed an impressive, high quality footprint in the Midland Basin, comprised of tier one acreage adjacent to Pioneer’s leading position. We are pleased with their decision to become long-term partners with Pioneer in a transaction that will complement our unmatched position in the core of the Permian Basin.
“Pioneer will incorporate these assets into our investment model, migrating the assets from significant production growth to a free cash flow model, moderating growth for the U.S. shale industry and generating significant value for our shareholders.”
Post-acquisition, existing shareholders of Pioneer Natural Resources will own nearly 89% stake in the combined company, while the remaining 11% stake will be held by DoublePoint Energy’s shareholders.
Commenting on Pioneer Natural Resources acquisition of DoublePoint Energy, Cody Campbell and John Sellers – Co-CEOs of DoublePoint Energy, said: “We are proud and appreciative of the work that our team has done to build a company and an asset base that is unparalleled in quality and truly cannot be replicated.
“We are honored to have the opportunity to combine our business with Pioneer, who we have long admired and regard as the premier operator in the Midland Basin. The fit and the synergies are clear, and we look forward to working with Pioneer to continue creating value.”
Pioneer Natural Resources acquisition of DoublePoint Energy, which is subject to meeting of customary closing conditions and regulatory approvals, is likely to close in Q2 2021.