Texas Shale producer Pioneer Natural to take over rival Parsley for $4.5 billion



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Texas Shale producer Pioneer Natural to take over rival Parsley for $4.5 billion

Pioneer Natural Resources Co., the Irving, Texas-headquartered US shale producer employing over 2,300 workers having had an average output of 345,000 barrels of oil per day, said in a statement on Tuesday that the US hydrocarbon explorer would purchase its smaller rival Parsley Energy Inc.

at a $4.5 billion all-stock buyout deal, remarking the latest dilution of a US shale producer amid a series of merger and acquisitions in the industries. In point of fact, latest move of Pioneer Natural Resources Co. came forth as the recent consolidation among the US shale producers, which had been slumped by a havoc-scale retreat in crude oil prices amid a pandemic resurgence in the US, while many industry analysts had raised a red flag over the future of US shale operations dues to a pandemic-propelled drought in crude oil demands.

Pioneer Natural to become the largest Permian Basin-only shale producer

Aside from that, while the recent move of Pioneer Natural, which has been the largest land holder in the Permian Basin, a mid-continent oil field basin located between Western Texas and South-eastern New Mexico, to acquire its smaller rival would create the largest Permian Basin-focused shale producer in the United States, Pioneer Natural Chief Executive Scott Sheffield said in a conference call with the reporters following the announcement on Tuesday that the deal was aimed at positioning the company as one of a few investable independents while putting a cap on expenses and streamlining cash flows.

Notably, Pioneer Natural Chief Executive Sheffield had also predicted that only three or four shale producers would likely to survive the ongoing apocalypse in US shale industry, naming his own company alongside ConocoPhillips, EOG Resources Inc.

and “maybe Hess Corp”. Meanwhile, citing the Pioneer Natural deal to buy Parsley at a $4.5 billion all-stock deal as “a historic blow” to the US-based shale firms, a senior M&A analyst at Enverus, Dittmar said late in the day, “There’s only going to be three or four survivors. Smaller companies don’t want to be left out in the cold”.