Exxon Billion-Dollar Bet: On Wednesday, Exxon Mobil (XOM.N) will likely make a historic business announcement: it will buy its American foe, Pioneer Natural Resources (PXD.N), for an amazing $60 billion. As part of the merger, Exxon will offer Pioneer more than $250 per share in stock.
This is according to insiders. The merger is expected to be the biggest business union of the year. This deal, which is about to be made public, was carefully thought out to make Exxon the biggest player in the U.S.’s giant oilfield and ensure efficient output for ten years.
Exxon, a global giant worth $442 billion, stays quiet as Tuesday approaches and doesn’t say anything about the rumor’s. On the other hand, Pioneer, who is supposed to be the bride in this historic wedding, stays quiet when the media asks her questions.
People who follow the industry know this upcoming merger will have huge financial effects because it is similar to Exxon’s famous $81 billion merger with Exxon Mobil Oil in 1998. Antitrust officials are ready to look into this merger because it puts Exxon Mobil at the top of American shale production and puts four big American oil companies in charge of most of the Permian Basin shale field and all of its huge infrastructure.
Exxon has gotten to this point by being smart with money and not giving up. After losing a lot of money and going into debt over the past two years, the company was able to weather the storm by cutting costs, selling off some assets, and making money from rising energy prices, mostly caused by political events like Russia’s invasion of Ukraine.
Exxon’s CEO, Darren Woods, led the company away from the green energy path that its European competitors were taking without caring about what other people thought. Following the $22 billion losses during the COVID-19 pandemic, Woods’ commitment to a fossil fuel-focused plan paid off, leading to a record $56 billion profit last year in a market that is becoming more concerned about climate change.
Also Read: Exxon Nears Mega Deal: $60B Advances for Pioneer Acquisition Talks
Exxon built up a significant war chest because it was smart with its money during the oil price boom. It now has almost $30 billion in cash ready to make smart investments.
Pioneer, an oil giant that won the shale revolution, is on the other side of this important trade. Within a decade, the U.S. made more than any other country. Pioneer, the third-largest oil producer in the Permian area, says its average production costs of $10.50 per barrel of oil and gas are meagre. This is because CEO Scott Sheffield is in charge of the company.
Exxon’s historic $53 billion purchase of B.G. Group in 2016 put it at the top of the world market for liquefied natural gas. The merger of Exxon and Pioneer would be even bigger.
But besides this buying story, Exxon Mobil has been involved in other things recently. In July, the huge energy company and Denbury Inc., a quick U.S. oil business with a complicated web of carbon dioxide pipes and underground storage, agreed to buy each other out for $4.9 billion in stock. This deal, seen as a strategic move to boost Exxon’s growing low-carbon portfolio, shows the company is serious about expanding its energy options.
The story of Exxon’s comeback includes a plot about how the share price changed over time. The company’s shares have steadily increased since falling to an all-time low of $30 per share in early 2020 during market turmoil. This is a great example of how resilient people are in the oil and gas business, which has ups and downs.
Our Reader’s Queries
Why would ExxonMobil buy pioneer resources for $60 billion?
ExxonMobil is set to acquire Pioneer, the third-largest oil producer in the Permian Basin, spanning across Texas and New Mexico. This strategic move is expected to solidify ExxonMobil’s position as the leading producer in the region, with their production volume projected to exceed 1.3 million barrels per day.
How much is Exxon paying for Pioneer?
In just a week, the ultimate declaration was made: Pioneer was to be granted Exxon stock valued at $59.5 billion, with an 18% premium over its market value prior to the media coverage. On the morning of October 11th, Woods and Sheffield were seen together for media interviews at a studio near Pioneer’s Irving headquarters.
What is Exxon 3rd quarter earnings 2023?
Exxon Mobil Corporation has reported impressive third-quarter 2023 earnings of $9.1 billion, which translates to $2.25 per share assuming dilution. The company’s cash flow from operations also saw a significant increase, reaching $16.0 billion, up by $6.6 billion compared to the previous quarter. These results are a testament to Exxon Mobil’s continued success and commitment to delivering value to its stakeholders.
Exxon is reportedly in discussions to acquire a shale producer based in Irving, Texas for over $250 per share. Sources familiar with the matter have stated that an all-stock agreement may be announced as early as Wednesday. The deal has not yet been made public and the sources have requested anonymity.