Pioneer Energy has entered into an agreement with Parsley Energy in an all-stock transaction worth $4.5 billion as part of the latest consolidation of the shale industry, according to a press release.
The strategic merger is expected to result in annual cost savings of approximately $325 million through operational efficiencies and reductions in general and administrative (G&A) and interest expenses. Furthermore, it propels Pioneer to the status as the largest independent exploration and production (E&P) company in the Permian basin with approximately 930,000 net acres, 328,000 barrels of oil per day (bbl/d), and 558,000 barrels oil equivalent per day (bbloe/d).
Scott Sheffield, CEO of Pioneer stated, “This transaction creates an unmatched independent energy company by combining two complementary and premier Permian assets, further strengthening Pioneer’s leadership position within the upstream energy sector. Parsley’s high-quality portfolio in both the Midland and Delaware Basins, when added to Pioneer’s peer-leading asset base, will transform the investing landscape by creating a company of unique scale and quality that results in tangible and durable value for investors.”
Under the terms of the agreement, Parsley shareholders will receive a fixed exchange ratio of 0.1252 shares of Pioneer common stock for each share of Parsley common stock owned. Also, the deal will see Pioneer take on Parsley’s debt in its entirety which approximately totals $7.6 billion.