US-based Pioneer Natural Resources has agreed to acquire oil producer DoublePoint Energy for approximately $6.4bn.
As per the deal, Pioneer Natural Resources will issue around 27.2 million of its shares and $1bn in cash to DoublePoint Energy’s shareholders.
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The consideration also includes assumption of about $900m of debt and liabilities of DoublePoint Energy.
Pioneer Natural Resources said that the DoublePoint Energy’s acreage to be added to its portfolio is predominantly undrilled and supplements its asset base.
The deal is expected to help Pioneer Natural Resources to grow its acreage position to over one million net acres.
DoublePoint Energy co-CEOs Cody Campbell and John Sellers in a joint statement said: “We are honoured 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.
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By GlobalData“The fit and the synergies are clear, and we look forward to working with Pioneer to continue creating value.”
Pioneer Natural Resources expects the deal to result in a contiguous position of nearly 97,000 net acres that directly offsets and overlaps its existing presence in the Midland Basin.
Subject to completion of the deal, Pioneer Natural Resources’ existing shareholders will hold a stake of around 89% stake in the combined company, while DoublePoint Energy’s shareholders will hold the remaining stake of 11%.
Pioneer Natural Resources CEO Scott Sheffield said: “DoublePoint has amassed an impressive, high quality footprint in the Midland Basin, comprised of tier one acreage adjacent to Pioneer’s leading position.
“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.”
The deal, which is subject to regulatory approvals and customary closing conditions, is planned for completion in second quarter of this year.
