I forgot to post until a reader reminded me: Pioneer to buy Parsley.
Pioneer Natural Resources Co. as agreed to buy Parsley Energy Inc. for $4.5 billion, the latest in a flurry of U.S. oil tie-ups as companies seek to weather low prices brought about by the coronavirus pandemic.
The all-stock deal, which values Parsley at a 7.9% premium to its closing value Monday, would solidify Pioneer’s place as one of the largest producers in the Permian Basin of Texas and New Mexico, the top American oil field.
The long-anticipated string of transactions is expected to continue for healthier companies in the country’s most prolific oil fields, investors said, while many smaller, debt-burdened companies that are hoping for a deal may draw few offers.
Pioneer Chief Executive Scott Sheffield said in an interview Tuesday that size and scale would be key to surviving as an independent oil-and-gas producer as the world transitions away from fossil fuels, and for his company would help it return more cash to shareholders. But he said additional combinations of industry players may take time.
“I do not see much more coming until these other companies can deliver with excess cash flow over the next two or three years,” he said.
“The combination of Parsley and Pioneer creates an organization set to thrive as we forge a strong new link at the low end of the global cost curve,” Parsley Chief Executive Matt Gallagher said in a statement. He is poised to join the combined company’s board of directors
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