At the end of last year, Pioneer Natural Resources Inc. (NYSE: PXD) reported total reserves of oil and natural gas totaling 2.37 billion barrels of oil equivalent. During 2022, Pioneer added about 150 million barrels to its reserves. Assuming a similar addition this year, excluding production volume, Pioneer’s reserves will total around 2.5 billion barrels at the end of the year.
The Deal
The Wall Street Journal reported late Thursday that Exxon Mobil Corp. (NYSE: XOM) is nearing a deal to acquire Pioneer for $60 billion. That pencils out to a price of $24 per barrel of oil equivalent. When Occidental Petroleum Corp. (NYSE: OXY) acquired Anadarko in 2019 for $38 billion, the company paid nearly $26 per barrel of Anadarko’s reserves of 1.47 billion barrels.
In other words, Exxon is getting a bargain if the deal is completed. Adding nearly 700,000 barrels a day of Pioneer’s production in the Permian/Midland Basin to its production of around 620,000 barrels a day will make Exxon by far the largest producer in the richest basin in the United States.
Pioneer shareholders will be getting a premium of around 20% to Thursday’s closing price of $214.96. With 233.1 million shares outstanding, Exxon’s offer is worth about $257 per share. Occidental paid a premium per share of 22% when it acquired Anadarko.
In Other News
On Thursday, shares of Rivian Automotive Inc. (NASDAQ: RIVN) closed down 23% following its announcement that it would issue $1.5 billion worth of convertible notes due in 2030. After markets closed on Thursday, Rivian said it would pay a coupon of 3.625%. Initial purchasers have been granted a 13-day option to acquire an additional $225 million in the notes.
For noteholders wishing to convert their notes to Rivian stock, the initial conversion rate per $1,000 of principal will be approximately 42.93 shares of common stock or a per-share price of around $23.29. The premium to noteholders who convert their notes to Rivian stock is about 27.5% based on Thursday’s closing price of $18.27.
Thursday’s demolition of Rivian stock also caused collateral damage among other EV makers. Lucid Group Inc. (NASDAQ: LCID) dropped more than 7%, Fisker Inc. (NYSE: FSR) fell by more than 4%, and Lordstown Motors, currently wending its way through bankruptcy, dropped more than 9% on its over-the-counter-traded shares (RIDEQ).
Rivian stock traded up about 0.4% at $18.35 in Friday’s premarket session, and Lucid stock traded up about 0.6% at $5.19.
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