Pioneer Natural Resources has announced it will acquire DoublePoint Energy, reflecting a bullish outlook on fossil fuels and the Permian Basin. Compensation for the deal, with an enterprise value of $6.4 billion, will consist of 27.2 million Pioneer shares, $1 billion in cash, and the assumption of $0.9 billion in debt.
The acquired assets, which include 97,000 net acres in the Permian Basin, are expected to reach production of 100,000 barrels per day by the end of the second quarter and to be accretive to EPS in 2021.
The company also expects to realize annual cost synergies of $175 million through general and administrative cost reductions and operational efficiencies.
Following the closing of the transaction, Pioneer shareholders will own about 89% of the combined company while DoublePoint owners (which include several private equity firms, including Apollo) will own the remaining 11%.