Pioneer Natural Resources (PXD) Update - Oct 21

[dan_s]

This is why those of you that own Parsley Energy (PE) should be VERY HAPPY with the merger into PXD.

From Stifel on 10-21-2020:Pioneer Natural Resources Company (PXD, $83.53, Buy; Target $215.00)
- Pioneer acquires Parsley in $4.5B all-stock deal - Derrick Whitfield < Derrick is an extremely sharp energy sector analyst.

"After the close on Tuesday, Pioneer Natural Resources (PXD) announced the previously-speculated acquisition of Parsley Energy (PE) in an all-stock transaction valued at $4.5 billion. Parsley shareholders will receive a fixed exchange ratio of 0.1252 shares of Pioneer common stock for each share of Parsley stock owned, implying a 7.9% premium or $330 million based on closing prices on October 19, 2020 (pre-acquisition speculation). The total transaction value, inclusive of Parsley's debt, is ~$7.6 billion. Pioneer noted that the transaction is accretive to key metrics, including cash flow per share, earnings per share and corporate returns. Notably, the transaction achieves synergies (~$2.0B of NPV-10) equal to nearly six times the premium value. We view the transaction as slightly positive for Pioneer as it enhances the stock's return-of-capital metrics. While the transaction indicates Pioneer is not a near-term seller, we believe the combined company could still be a target for the U.S. Majors."
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Yesterday BofA Equity Research put out a long report on the merger. They said they maintain BUY recommendations on both companies and see $1.4 Billion of annual savings from the merger.

[dan_s]

https://oilprice.com/Energy/Crude-Oil/P ... tions.html