- Transforms ExxonMobil’s upstream portfolio, more than doubling
the company’s Permian footprint and creating an industry-leading,
high-quality, high-return undeveloped U.S. unconventional inventory
position
- Expect to generate double-digit returns by recovering more
resource, more efficiently and with a lower environmental
impact
- Combines Pioneer’s sizeable acreage, entrepreneurial culture
and deep industry expertise with ExxonMobil’s balance-sheet
strength, advanced technologies and industry-leading project
development capabilities
- Plans to accelerate Pioneer’s net zero Permian ambition from
2050 to 2035
- Strengthens U.S. economy and energy security
Exxon Mobil Corporation (NYSE: XOM) and Pioneer Natural
Resources (NYSE: PXD) jointly announced a definitive agreement for
ExxonMobil to acquire Pioneer. The merger is an all-stock
transaction valued at $59.5 billion, or $253 per share, based on
ExxonMobil’s closing price on October 5, 2023. Under the terms of
the agreement, Pioneer shareholders will receive 2.3234 shares of
ExxonMobil for each Pioneer share at closing. The implied total
enterprise value of the transaction, including net debt, is
approximately $64.5 billion.
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ExxonMobil Chairman and CEO Darren Woods
(Photo: Business Wire)
The merger combines Pioneer’s more than 850,000 net acres in the
Midland Basin with ExxonMobil’s 570,000 net acres in the Delaware
and Midland Basins, creating the industry’s leading high-quality
undeveloped U.S. unconventional inventory position. Together, the
companies will have an estimated 16 billion barrels of oil
equivalent resource in the Permian. At close, ExxonMobil’s Permian
production volume would more than double to 1.3 million barrels of
oil equivalent per day (MOEBD), based on 2023 volumes, and is
expected to increase to approximately 2 MOEBD in 2027. ExxonMobil
believes the transaction represents an opportunity for even greater
U.S. energy security by bringing the best technologies, operational
excellence and financial capability to an important source of
domestic supply, benefitting the American economy and its
consumers.
“Pioneer is a clear leader in the Permian with a unique asset
base and people with deep industry knowledge. The combined
capabilities of our two companies will provide long-term value
creation well in excess of what either company is capable of doing
on a standalone basis,” said ExxonMobil Chairman and CEO Darren
Woods. “Their tier-one acreage is highly contiguous, allowing for
greater opportunities to deploy our technologies, delivering
operating and capital efficiency as well as significantly
increasing production. As importantly, as we look to combine our
companies, we bring together environmental best-practices that will
lower our environmental footprint and plan to accelerate Pioneer’s
net-zero plan from 2050 to 2035.”
Pioneer Chief Executive Officer Scott Sheffield commented, “The
combination of ExxonMobil and Pioneer creates a diversified energy
company with the largest footprint of high-return wells in the
Permian Basin. As part of a global enterprise, Pioneer, our
shareholders and our employees will be better positioned for
long-term success through a size and scale that spans the globe and
offers diversity through product and exposure to the full energy
value chain. The consolidated company will maintain its leadership
position, driving further efficiencies through the combination of
our adjacent, contiguous acreage in the Midland Basin and our
highly talented employee base, with the improved ability to deliver
durable returns, creating tangible value for shareholders for
decades to come.”
Transaction Benefits Combining Pioneer’s differentiated
Permian inventory and basin knowledge with ExxonMobil’s proprietary
technologies, financial resources, and industry-leading project
development is expected to generate double-digit returns by
recovering more resource, more efficiently and with a lower
environmental impact.
The transaction is a unique opportunity to deliver leading
capital efficiency and cost performance as well as increase
production by combining Pioneer’s large-scale, contiguous,
high-quality undeveloped Midland acreage with ExxonMobil’s
demonstrated industry-leading Permian resource development
approach.
The unique, complementary fit of Pioneer’s contiguous acreage
will allow ExxonMobil to drill long, best-in-class laterals -- up
to four miles -- which will result in fewer wells and a smaller
surface footprint. The company also expects to enhance field
digitalization and automation that will optimize production
throughput and cost.
The combination transforms ExxonMobil’s upstream portfolio by
increasing lower-cost-of-supply production, as well as short-cycle
capital flexibility. The company expects a cost of supply of less
than $35 per barrel from Pioneer’s assets. By 2027, short-cycle
barrels will comprise more than 40% of the total upstream volumes,
positioning the company to more quickly respond to demand changes
and increase capture of price and volume upside.
The transaction’s unique value creation opportunity results in
significant synergies and further upside potential that will be
shared by both companies’ shareholders. The merger is anticipated
to be accretive immediately and highly accretive mid- to long-term
to ExxonMobil earnings per share and free cash flow, with a long
cash flow runway. ExxonMobil’s strong balance sheet combined with
Pioneer’s added surplus free cash flow provides upside opportunity
to enhance shareholder capital returns post-closing.
Finally, this merger represents the opportunity for even greater
U.S. energy security by bringing the best technology, operational
excellence, environmental best practices and financial capability
to an important source of domestic supply, benefitting the American
economy and its consumers.
Accelerating to Net Zero in the Permian ExxonMobil has
industry-leading plans to achieve net zero Scope 1 and Scope 2
greenhouse gas emissions from its Permian unconventional operations
by 2030. As part of the transaction, ExxonMobil intends to leverage
its Permian greenhouse gas reduction plans to accelerate Pioneer’s
net zero emissions plan by 15 years, to 2035.
ExxonMobil will leverage the same aggressive strategy and apply
its industry-leading new technologies for monitoring, measuring,
and addressing fugitive methane to lower both companies’ methane
emissions.
In addition, using combined operating capabilities and
infrastructure, we expect to increase the amount of recycled water
used in our Permian fracturing operations to more than 90% by
2030.
Transaction Details The per-share merger consideration
noted above represents an approximate 18% premium to Pioneer’s
undisturbed closing price on October 5 and a 9% premium to its
prior 30-day volume-weighted average price on the same day.
The Boards of Directors of both companies have unanimously
approved the transaction, which is subject to customary regulatory
reviews and approvals. It is also subject to approval by Pioneer
shareholders. The transaction is expected to close in the first
half of 2024.
Advisors Citi acted as lead financial advisor, Centerview
Partners as financial advisor, and Davis Polk & Wardwell as
legal advisor to ExxonMobil. Goldman Sachs, Morgan Stanley, Petrie
Partners and Bank of America Securities acted as financial advisors
to Pioneer; Gibson, Dunn & Crutcher LLP acted as legal advisor
to Pioneer.
Conference Call ExxonMobil and Pioneer will discuss the
proposed merger during a webcast at 11 a.m. Central Time today,
Wednesday, October 11, 2023. To listen to the event, review the
investor presentation or access an archived replay, please visit
the ExxonMobil Investor website or the Pioneer investor
website.
###
About ExxonMobil ExxonMobil, one of the largest publicly
traded international energy and petrochemical companies, creates
solutions that improve quality of life and meet society’s evolving
needs.
The corporation’s primary businesses - Upstream, Product
Solutions and Low Carbon Solutions – provide products that enable
modern life, including energy, chemicals, lubricants, and lower
emissions technologies. ExxonMobil holds an industry-leading
portfolio of resources, and is one of the largest integrated fuels,
lubricants, and chemical companies in the world. In 2021,
ExxonMobil announced Scope 1 and 2 greenhouse gas
emission-reduction plans for 2030 for operated assets, compared to
2016 levels. The plans are to achieve a 20-30% reduction in
corporate-wide greenhouse gas intensity; a 40-50% reduction in
greenhouse gas intensity of upstream operations; a 70-80% reduction
in corporate-wide methane intensity; and a 60-70% reduction in
corporate-wide flaring intensity.
With advancements in technology and the support of clear and
consistent government policies, ExxonMobil aims to achieve net-zero
Scope 1 and 2 greenhouse gas emissions from its operated assets by
2050. To learn more, visit exxonmobil.com and ExxonMobil’s
Advancing Climate Solutions.
Follow us on LinkedIn, Instagram and X.
About Pioneer Pioneer is a large independent oil and gas
exploration and production company, headquartered in Dallas, Texas,
with operations in the United States. For more information, visit
Pioneer’s website at www.pxd.com.
Important Information about the Transaction and Where to Find
It In connection with the proposed transaction between Exxon
Mobil Corporation (“ExxonMobil”) and Pioneer Natural Resources
Company (“Pioneer”), ExxonMobil and Pioneer will file relevant
materials with the Securities and Exchange Commission (the “SEC”),
including a registration statement on Form S-4 filed by ExxonMobil
that will include a proxy statement of Pioneer that also
constitutes a prospectus of ExxonMobil. A definitive proxy
statement/prospectus will be mailed to stockholders of Pioneer.
This communication is not a substitute for the registration
statement, proxy statement or prospectus or any other document that
ExxonMobil or Pioneer (as applicable) may file with the SEC in
connection with the proposed transaction. BEFORE MAKING ANY VOTING
OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF
EXXONMOBIL AND PIONEER ARE URGED TO READ THE REGISTRATION
STATEMENT, THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT
DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS
ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION
AND RELATED MATTERS. Investors and security holders may obtain free
copies of the registration statement and the proxy
statement/prospectus (when they become available), as well as other
filings containing important information about ExxonMobil or
Pioneer, without charge at the SEC’s Internet website
(http://www.sec.gov). Copies of the documents filed with the SEC by
ExxonMobil will be available free of charge on ExxonMobil’s
internet website at www.exxonmobil.com under the tab “investors”
and then under the tab “SEC Filings” or by contacting ExxonMobil’s
Investor Relations Department at investor.relations@exxonmobil.com.
Copies of the documents filed with the SEC by Pioneer will be
available free of charge on Pioneer’s internet website at
https://investors.pxd.com/investors/financials/sec-filings/. The
information included on, or accessible through, ExxonMobil’s or
Pioneer’s website is not incorporated by reference into this
communication.
Participants in the Solicitation ExxonMobil, Pioneer,
their respective directors and certain of their respective
executive officers may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information about the directors and executive officers of Pioneer
is set forth in its proxy statement for its 2023 annual meeting of
stockholders, which was filed with the SEC on April 13, 2023, in
its Form 10-K for the year ended December 31, 2022, which was filed
with the SEC on February 23, 2023, in its Form 8-K filed on May 30,
2023, in its Form 8-K filed on April 26, 2023 and in its Form 8-K
filed on February 13, 2023. Information about the directors and
executive officers of ExxonMobil is set forth in its proxy
statement for its 2023 annual meeting of stockholders, which was
filed with the SEC on April 13, 2023, in its Form 10-K for the year
ended December 31, 2022, which was filed with the SEC on February
22, 2023, in its Form 8-K filed on June 6, 2023 and in its Form 8-K
filed on February 24, 2023. Additional information regarding the
participants in the proxy solicitations and a description of their
direct or indirect interests, by security holdings or otherwise,
will be contained in the proxy statement/prospectus and other
relevant materials filed with the SEC when they become
available.
No Offer or Solicitation This communication is for
informational purposes and is not intended to, and shall not,
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote or approval, nor shall
there be any offer, solicitation or sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the U.S. Securities Act of 1933, as
amended.
Forward-Looking Statements This communication contains
“forward-looking statements” within the meaning of the federal
securities laws, including Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. In this context, forward-looking statements often
address future business and financial events, conditions,
expectations, plans or ambitions, and often contain words such as
“expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,”
“will,” “would,” “target,” similar expressions, and variations or
negatives of these words, but not all forward-looking statements
include such words. Forward-looking statements by their nature
address matters that are, to different degrees, uncertain, such as
statements about the consummation of the proposed transaction and
the anticipated benefits thereof. All such forward-looking
statements are based upon current plans, estimates, expectations
and ambitions that are subject to risks, uncertainties and
assumptions, many of which are beyond the control of ExxonMobil and
Pioneer, that could cause actual results to differ materially from
those expressed in such forward-looking statements. Important risk
factors that may cause such a difference include, but are not
limited to: the completion of the proposed transaction on
anticipated terms and timing, or at all, including obtaining
regulatory approvals that may be required on anticipated terms and
Pioneer stockholder approval; anticipated tax treatment, unforeseen
liabilities, future capital expenditures, revenues, expenses,
earnings, synergies, economic performance, indebtedness, financial
condition, losses, future prospects, business and management
strategies for the management, expansion and growth of the combined
company’s operations and other conditions to the completion of the
proposed transaction, including the possibility that any of the
anticipated benefits of the proposed transaction will not be
realized or will not be realized within the expected time period;
the ability of ExxonMobil and Pioneer to integrate the business
successfully and to achieve anticipated synergies and value
creation; potential litigation relating to the proposed transaction
that could be instituted against ExxonMobil, Pioneer or their
respective directors; the risk that disruptions from the proposed
transaction will harm ExxonMobil’s or Pioneer’s business, including
current plans and operations and that management’s time and
attention will be diverted on transaction-related issues; potential
adverse reactions or changes to business relationships resulting
from the announcement or completion of the proposed transaction;
rating agency actions and ExxonMobil and Pioneer’s ability to
access short- and long-term debt markets on a timely and affordable
basis; legislative, regulatory and economic developments, including
regulatory implementation of the Inflation Reduction Act, timely
and attractive permitting for carbon capture and storage by
applicable federal and state regulators, and other regulatory
actions targeting public companies in the oil and gas industry and
changes in local, national, or international laws, regulations, and
policies affecting ExxonMobil and Pioneer including with respect to
the environment; potential business uncertainty, including the
outcome of commercial negotiations and changes to existing business
relationships during the pendency of the proposed transaction that
could affect ExxonMobil’s and/or Pioneer’s financial performance
and operating results; certain restrictions during the pendency of
the proposed transaction that may impact Pioneer’s ability to
pursue certain business opportunities or strategic transactions or
otherwise operate its business; acts of terrorism or outbreak of
war, hostilities, civil unrest, attacks against ExxonMobil or
Pioneer, and other political or security disturbances; dilution
caused by ExxonMobil’s issuance of additional shares of its common
stock in connection with the proposed transaction; the possibility
that the transaction may be more expensive to complete than
anticipated, including as a result of unexpected factors or events;
changes in policy and consumer support for emission-reduction
products and technology; the impacts of pandemics or other public
health crises, including the effects of government responses on
people and economies; global or regional changes in the supply and
demand for oil, natural gas, petrochemicals, and feedstocks and
other market or economic conditions that impact demand, prices and
differentials, including reservoir performance; changes in
technical or operating conditions, including unforeseen technical
difficulties; those risks described in Item 1A of ExxonMobil’s
Annual Report on Form 10-K, filed with the SEC on February 22,
2023, and subsequent reports on Forms 10‑Q and 8-K, as well as
under the heading “Factors Affecting Future Results” on the
Investors page of ExxonMobil’s website at www.exxonmobil.com
(information included on or accessible through ExxonMobil’s website
is not incorporated by reference into this communication); those
risks described in Item 1A of Pioneer’s Annual Report on Form 10-K,
filed with the SEC on February 23, 2023, and subsequent reports on
Forms 10-Q and 8-K; and those risks that will be described in the
registration statement on Form S-4 and accompanying prospectus
available from the sources indicated above. References to resources
or other quantities of oil or natural gas may include amounts that
ExxonMobil or Pioneer believe will ultimately be produced, but that
are not yet classified as “proved reserves” under SEC
definitions.
These risks, as well as other risks associated with the proposed
transaction, will be more fully discussed in the proxy
statement/prospectus that will be included in the registration
statement on Form S-4 that will be filed with the SEC in connection
with the proposed transaction. While the list of factors presented
here is, and the list of factors to be presented in the
registration statement on Form S-4 will be, considered
representative, no such list should be considered to be a complete
statement of all potential risks and uncertainties. Unlisted
factors may present significant additional obstacles to the
realization of forward-looking statements. We caution you not to
place undue reliance on any of these forward-looking statements as
they are not guarantees of future performance or outcomes and that
actual performance and outcomes, including, without limitation, our
actual results of operations, financial condition and liquidity,
and the development of new markets or market segments in which we
operate, may differ materially from those made in or suggested by
the forward-looking statements contained in this communication.
Neither ExxonMobil nor Pioneer assumes any obligation to publicly
provide revisions or updates to any forward-looking statements,
whether as a result of new information, future developments or
otherwise, should circumstances change, except as otherwise
required by securities and other applicable laws. Neither future
distribution of this communication nor the continued availability
of this communication in archive form on ExxonMobil’s or Pioneer’s
website should be deemed to constitute an update or re-affirmation
of these statements as of any future date.
Actions needed to advance ExxonMobil’s 2030 and 2035 greenhouse
gas emission-reductions plans are incorporated into its medium-term
business plans, which are updated annually. The reference case for
planning beyond 2030 is based on the Company’s Energy Outlook
research and publication. The Outlook is reflective of the existing
global policy environment, the Energy Outlook does not attempt to
project the degree of required future policy and technology
advancement and deployment for the world, or ExxonMobil, to meet
net zero by 2050. As future policies and technology advancements
emerge, they will be incorporated into the Outlook, and the
Company’s business plans will be updated accordingly. Actual future
results, including the achievement of net zero in Upstream Permian
Basin unconventional operated assets by 2030/2035 and plans to
lower methane emissions from operated assets, to increase water
recycling in our combined Permian operations, and to feed hydrogen,
ammonia, and carbon capture projects could vary depending on the
ability to execute operational objectives on a timely and
successful basis; policy support for emission-reduction products
and technologies; changes in laws, regulations and international
treaties regarding lower emission technologies and projects;
government incentives; unforeseen technical or operational
difficulties; the outcome of research efforts and future technology
developments, including the ability to scale projects,
technologies, and markets on a commercially competitive basis;
changes in supply and demand and other market factors affecting
future prices of oil, gas, and petrochemical products; the actions
of competitors; and other factors discussed in this release and in
the additional Forward Looking Statement disclaimer included
above.
All references to production rates, project capacity, resource
size, and acreage are on a gross basis, unless otherwise noted.
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