US oil producer Pioneer Natural Resources has agreed to acquire privately owned rival Double Point Energy for about $ 6.4 billion, speeding up the mergers of shale oil producers.
Mergers and acquisitions of oil fields accelerated this year as energy prices recovered after the market crash last year due to the Corona virus.
Firms with a strong balance sheet are buying privately owned heavily indebted operators and promise to focus more on profitability than volume growth.
The acquisition of fast-growing oil companies such as Double Point Energy by operators of aging fields “will allay concerns that US shale (oil) may flood the market with supplies again and lead to a price collapse,” said Andrew Dietmar, a M&A analyst at Envirus.
The deal, first reported by Reuters, is the second major purchase of Pioneer and the fourth multi-billion dollar deal in the shale oil sector this year.
In January, Pioneer closed a $ 4.5 billion fully-equity deal to buy Parsley Energy, giving it one of the largest positions in the Permian Basin, the main US shale oil field.
In January, ConocoPhillips completed the acquisition of Concho Resources worth $ 9.7 billion, and Devon Energy completed its purchase of WBX Energy for $ 5.8 billion.
Last year, Chevron bought Noble Energy for $ 12.1 billion in equity and debt.
Double Point Energy will add 97,000 acres of Pioneer holdings in the Permian Basin.
The drilling company was founded in 2018 by entrepreneurs Cody Campbell and John Sellers and with support from Apollo Global Management and Quantum Energy Partners.
The acquisition, involving shares and cash, is the largest privately owned US oil producer since 2011.
It increases Pioneer holdings in the Permian Basin to more than one million net acres. Pioneer said it will close the deal by June.
The article “Pioneer” of America acquires “Double Point” with 6.4 billion dollars was written in the newspaper Al-Borsa.