ExxonMobil doubles down on fossil fuels with $59.5B deal


ExxonMobil is buying Pioneer Natural Resources in an all-stock deal valued at $59.5 billion―its largest buyout since acquiring Mobil two decades ago―creating a colossal fracking operator in West Texas, reports The Associated Press.

Including debt, ExxonMobil is committing about $64.5 billion to the acquisition, leaving no doubt of the Texas energy company’s commitment to fossil fuels as energy prices surge.

Pioneer shareholders will receive 2.32 shares of ExxonMobil for each Pioneer share they own.

ExxonMobil purchased XTO Energy in 2009 for approximately $36 billion. In the late 1990s, the merger between Exxon and Mobil was valued around $80 billion.

The deal with Pioneer Natural expands ExxonMobil’s presence in the Permian basin. Drilling in that region accounted for 18% of all U.S. natural gas production last year, according to the U.S. Energy Information Administration.

Pioneer’s more than 850,000 net acres in the Midland Basin will be combined with ExxonMobil’s 570,000 net acres in the Delaware and Midland Basin, nearly contiguous fields that will allow the combined company to trim costs—a big driver of the deal.

Natural gas rigs in operation have declined over 26% in the U.S. since the start of the year, according to government data, largely due to the rising costs for drilling materials and labor over the past two years.

“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,” ExxonMobil CEO Darren Woods says of Pioneer in a prepared statement.

The company will have an estimated 16 billion barrels of oil equivalent in the Permian.

Once the deal closes, ExxonMobil’s Permian production volume will more than double to 1.3 million barrels of oil equivalent per day, based on 2023 volumes. It’s expected to climb to about 2 million barrels of oil equivalent per day in 2027. Read more.