- $10 billion vs $6.4 billion
- 550,000 acres vs 97,000 acres
- $80-oil: he survives as CEO
- $90-oil: he looks brilliant; becomes the new face of the shale sector
- $100-oil: enshrined as a saint at the Holy Lady of Shale
- no financial analysis; nothing more than a reporter's narrative of the press release in the big scheme of things;
- will have more than one million net acres in the Permian (Midland Basin);
- article does say the company paid a "hefty premium" relative to recent mergers and acquisitions but doesn't say what that "hefty premium" was;
- bolt-on acquisition
- Midland Basin
- $6.4 billion
- 97,000 high quality (tier 1) net acres
- back of the envelope: $6.4 billion / 97,000 net acres = $66,000 / acre
- 27.2 million shares of Pioneer common stock
- $1 billion in cash
- $0.9 billion in debt and liabilities
- the deal "will lead to an increase in the expected per share variable dividend beginning in 2022" -- raise your hand if you think you will see an increased dividend in 2022.
"PXD Gets It"
Pioneer's market cap is $36 billion. Pioneer's total value is contained within its Permian footprint.
Does the Double Point Energy footprint look like a sixth of that $36-billion market cap?
Possibly. I don't know. I find it interesting how the analyst who wrote the note in the graphic above simply "ignored" 2/3rds of $6.4 billion, or $4.3 billion. This is like saying Double Point Energy was paid $6.4 billion for the deal, but it only cost Pioneer $2.1 billion. Somehow the books don't balance. Whatever. Value it anyway you want.
What others think:
- watch share price of PDX; should be fascinating; and,
- article over at SeekingAlpha on this deal.