Pioneer Natural Resources Company has agreed to acquire independent oil and natural gas group Parsley Energy in an all-stock transaction worth USD 7.60 billion, including debt.
Under the terms of the deal, the New York-listed target’s shareholders will receive 0.13 of a stock for each scrip held in the company, representing a total value of USD 4.50 billion.
The offer represents USD 10.96 for each security held in Parsley Energy, based on Pioneer Natural’s close of USD 87.05 on 19th October, the last trading day prior to the announcement.
In addition, this represents a premium of 8.5 per cent to the target’s close of USD 10.10 on the same date.
Pioneer Natural intends to issue around 52.00 million stocks in the transaction and following closing will own around 76.0 per cent of the combined company, with shareholders in Parsley Energy controlling the balance.
Completion is slated for the first quarter of 2021, subject to shareholder and regulatory approval.
Parsley Energy is an independent oil and natural gas producer focused on the acquisition, development, exploration and production of unconventional oil and natural gas reserves in the Permian Basin.
The combination is expected to drive annual synergies of USD 325.00 million and to increase cash flow per stock, free cash flow, earnings per share and corporate returns beginning in the first year.
Pioneer Natural and Parsley Energy will together be the leading Permian independent exploration and production company, with a premium asset base of around 930,000 net acres, no federal acreage and a production base of 328,000 barrels of oil per day and 558,000 barrels of oil equivalent per day as of the second quarter of 2020.
The target intends to release its third quarter financial statement on 28th October 2020.
In the six months ended 30th June 2020, Parsley Energy posted revenue of USD 785.03 million, down 15.2 per cent from USD 926.21 million in the corresponding period of 2019.
Net loss totalled USD 4.13 billion in the same timeframe, compared to a profit of USD 106.99 million in H1 2019.
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