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Home / Business / As oil prices rebound, Broken Titan is expanding with a $6.4 billion acquisition

As oil prices rebound, Broken Titan is expanding with a $6.4 billion acquisition



The “bolt-type” acquisition will expand Pioneer’s leading footprint in the Permian Basin, the largest oil field in the United States, Located in southeastern New Mexico and West Texas. As oil prices recover from the pandemic, this shows confidence.
Pioneer CEO Scott Sheffield said in the eastern Permian Basin: “DoublePoint has accumulated an impressive high-quality footprint in the central basin,” Pioneer added that the transaction “will complement our Unparalleled status in the core area of ​​the Permian Basin.”
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The company said the transaction will allow Pioneer to use approximately 97,000 consecutive net acres (mostly undrilled land), bringing the total position of Pioneer to more than 1 million acres.

The company expects that by the end of the second quarter, the new land will produce approximately 100,000 barrels of oil per day.

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The deal comes as energy companies are trying to recover from the huge losses caused by last year’s low oil prices and the pandemic. As oil prices rise and the economy reopens, there has been an increase in M&A activity by companies that remain relatively healthy in the region.This is the second purchase recently pioneer (PXD) — In October, it bought Parsley Energy for US$4.5 billion.

Andrew Dittmar, a senior M&A analyst, said: “It’s a bit surprising to see that the pioneer company announced another major acquisition soon after its deal with Parsley, but the company may already feel that These assets are too close to their existing positions and cannot be transferred.” Data analysis company Enverus said in an email comment.

Pioneer expects that the merger will help it save approximately US$175 million in annual costs, or approximately US$1 billion in total over 10 years. This will likely enable the company to return more cash to shareholders.

Vanguard shares closed up more than 3.5% on Thursday.

The transaction is expected to be completed in the second quarter of 2021 and includes 27.2 million Vanguard shares, $1 billion in cash, and assume approximately $900 million in debt and liabilities.


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