Titan fracking increases with $ 6.4 billion acquisition as oil prices recover

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The “forced” acquisition will expand the footprint of Pioneer, already an industry leader, in the Permian Basin, the largest oil field in the United States, located southeast of New Mexico and west of Texas. It is a sign of confidence as oil prices recover from the pandemic.
“DoublePoint has amassed an impressive, high-quality footprint in the Midland Basin,” said the eastern part of the Permian Basin, Pioneer CEO Scott Sheffield said in a statement, adding that the ‘agreement’ will complement our unparalleled position in the center of the Permian basin. ‘

The deal will give Pioneer access to about 97,000 contiguous net acres of mostly unperforated land, which will bring Pioneer’s total position to more than a million net acres, the company said.

It expects the new surface to produce about 100,000 barrels of oil a day by the end of the second quarter.

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The deal comes as energy companies are working to recover from last year’s low oil prices and the huge losses caused by the pandemic. Companies that remained relatively healthy have increased their mergers and acquisitions activity in the region as oil prices rise and the economy reopens. This is the second recent purchase of Pioneer (PXD) – in October, he spent $ 4.5 billion buying Parsley Energy.

“It’s a bit surprising to see Pioneer announce another major acquisition so soon after the Parsley deal, but the company may have felt the assets are too close to its existing position to set aside,” Andrew said. Dittmar, a senior mergers and acquisitions analyst with data analytics firm Enverus, said in email comments.

Pioneer expects the merger will help it save about $ 175 million in annual costs, or a total of about $ 1 billion in ten years. This will likely allow the company to return more cash to shareholders.

Pioneer shares closed more than 3.5% on Thursday.

The deal is expected to close in the second quarter of 2021 and includes 27.2 million Pioneer shares, $ 1 billion in cash and the assumption of approximately $ 900 million in liabilities.

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