Pioneer to buy DoublePoint in $6.4bn deal

US shale company Pioneer Natural Resources is set to acquire the leases and related assets of its counterpart DoublePoint Energy in a transaction worth $6.4bn, the company said on April 1.

Pioneer will pay for the business by providing 27.2mn of its common shares and $1bn in cash. It will also assume $900mn in debt and liabilities. The company expects to achieve $175mn in operational efficiencies and cost reductions through the transaction, which it expects to close in the second quarter. 

“DoublePoint has amassed an impressive, high quality footprint in the Midland basin, comprised of tier-one acreage adjacent to Pioneer’s leading position,” Scott Sheffield, Pioneer’s CEO, said. “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.”

The Midland basin is situated within the eastern region of the broader Permian reservoir, among the more prolific shale oil and gas basins in the US.

The transaction brings Pioneer’s shale operations to more than 1mn net acres. None of that acreage is situated within federal lands, freeing Pioneer from the pause in drilling on federal lands imposed by US president Joe Biden. Most of the acreage is undrilled.

Pioneer reported average fourth quarter production of 364,000 barrels of oil equivalent (boe)/day and expects production from the assets acquired from DoublePoint to reach roughly 100,000 boe/day by late in the second quarter.

Pioneer was among the shale producers engaged heavily in merger and acquisition activity last year. In October, it paid $4.5bn to buy fellow Permian basin producer Parsley Energy.