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ExxonMobil agrees to buy shale rival Pioneer in $60 billion deal

New York (CNN) — ExxonMobil has agreed to buy Pioneer Natural Resources, a major shale oil producer in the deal that will more than double Exxon’s footprint in the Permian Basin in the Southwest United States.

Though it’s the largest US oil company, ExxonMobil was relatively slow to develop shale oil as the rest of the industry used to to greatly increase US oil production in the last decade. Pioneer is the largest producer in the Permian Basin, with 850,000 net acres in the area around Midland, Texas, with ExxonMobil’s 570,000 net acres in the Delaware and Midland Basins.

ExxonMobil’s Permian production volume would more than double to the equivalent of 1.3 million barrels of oil a day, according to the company.

“Pioneer is a clear leader in the Permian with a unique asset base and people with deep industry knowledge. The combined capabilities of our two companies will provide long-term value creation well in excess of what either company is capable of doing on a standalone basis,” said ExxonMobil CEO Darren Woods.

Under the deal Pioneer shareholders would receive 2.3234 shares of ExxonMobil for each Pioneer share, an 8% premium based on Tuesday’s closing price. Shares of Pioneer were up about 2% in premarket trading on the news, while shares of ExxonMobil were lower.

But the deal could face regulatory hurdles.

The Biden administration has taken a much more critical position on approving mergers than past administrations, challenging some deals on antitrust grounds. And it has also been critical of big oil for high oil and gas prices, even though those prices are primarily set on global markets, not by the oil companies themselves.

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