ExxonMobil Becomes The Biggest Big Dog In The Permian Basin

The process of consolidation in the U.S. shale business took a giant leap Wednesday with ExxonMobil’s
XOM
announcement it will merge with Permian Basin pure-play company Pioneer Natural Resources
PXD
in an all-stock deal valued at $59.5 billion, or $253 per share. Exxon said in a release that the implied total value of the enterprise is $64.5 billion, including net debt.

A Deal That Checks Off All The Boxes

ExxonMobil CEO Darren Woods said that this long-anticipated merger with Pioneer ticks off a number of key boxes for any company seeking to grow through mergers and acquisitions in the shale space: An outstanding work force, long-term value creation, a high volume of tier-one acreage that is highly contiguous to Exxon’s own acreage base, and opportunities to create value through efficiency gains and economies of scale.