Exxon Mobil Corp. will acquire Irving-based Pioneer Natural Resources in an all-stock transaction valued at $59.5 billion, the companies announced.

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.

The companies said 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.

The deal is expected to close in the first half of 2024. ExxonMobil is now based in Houston after relocating from its former headquarters in Irving, where it maintains a large campus.

“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,” ExxonMobil Chairman and CEO Darren Woods said in a statement. “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.”

Together, the companies said they will have an estimated 16 billion barrels of oil equivalent resource in the Permian.

At close, ExxonMobil said its Permian production volume would more than double to 1.3 million barrels of oil equivalent (MOEBD) per day, based on 2023 volumes, and is expected to increase to roughly 2 MOEBD in 2027.

Combining Permian inventory with tech and financial resources

ExxonMobil said the deal is 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.

“The combination of ExxonMobil and Pioneer creates a diversified energy company with the largest footprint of high-return wells in the Permian Basin,” Pioneer CEO Scott Sheffield said in a statement. “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,” Sheffield added, “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.”

The companies said that by combining Pioneer’s differentiated Permian inventory and basin knowledge with ExxonMobil’s proprietary technologies, financial resources, and industry-leading project development, they are expected to generate double-digit returns by recovering more resource, more efficiently, and with a lower environmental impact.

ExxonMobil added that it 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.

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