Pioneer Natural Resources [NYSE: PXD] to Acquire DoublePoint Energy

Pioneer Natural Resources Company [NYSE: PXD] has announced the acquisition of DoublePoint Energy. The firm has inked a conclusive agreement to purchase the leasehold interests and related assets of DoublePoint Energy. The firm has bought a DoublePoint deal priced at nearly $6.4 billion as of April 1, 2021.

The deal is defined as the purchase by a Pioneer affiliate of 100% of the limited liability firm interests of the fully owned unit, Double Eagle III Midco 1 LLC. Of DoublePoint. DoublePoint has a spectacular reputation within the Midland Basin. This deal will add to the firm’s unrivaled position within the essence of the Permian Basin.

Acquisition Benefits

Pioneer disclosed that this deal will increase the important financial metrics of the firm. Its financial metrics include EPS, cash flow, Free cash flow, and corporate returns during 2021 and beyond. PXD is also anticipating that this acquisition will aggravate the per share variable dividend commencing in 2022 and beyond.

Furthermore, this deal also signifies an adjoining position of nearly 97,000 high-quality net acres directly compensating and intersecting the existing footprint of Pioneer. The purchase acreage will increase the premium asset base of Pioneer. It will boost the firm’s acreage position to more than 1 million net acres with no coverage to federal lands.

Additionally, it is also projected that this deal will lead to the annual cost-cutting of nearly $175 million through operating efficiencies and cutbacks in G&A and interest costs. It has also been anticipated that this purchase decision will also sustain the top-tier balance sheet.

Financial Details

PXD will issue nearly 27.2 million shares of common stock in the deal with an extra $1 billion of cash. After execution, current Pioneer shareholders will hold nearly 89% of the merged firm and current DoublePoint owners will hold nearly 11% of the merged firm. The board of directors of Pioneer has provided the authorization to this deal and it is anticipated that the deal will be finalized in 2021.