Pioneer Natural Resources has announced plans to acquire the leasehold interests and related assets of DoublePoint Energy, a Fort Worth upstream oil and gas company. The deal, which is valued at $6.4 billion, was announced on the evening of April 1 and is expected to close in the second quarter of 2021.
The bolt-on acquisition would strengthen Pioneer’s foothold in the Permian Basin with DoublePoint’s assets located within the Midland Basin with an expected $175 million in cost synergies.
DoublePoint’s assets include 97,000 net acres that either offset or overlap with Pioneer’s existing footprint, which would raise its acreage position to more than 1 million net acres with – notably – no exposure to federal lands. With much of DoublePoint’s acreage undrilled, Pioneer expects production of about 100,000 barrels per day starting in the second quarter upon the close of the deal.
Gibson Dunn & Crutcher served as counsel to Pioneer with a team led by partners Michael P. Darden of Houston and Jeffrey Chapman of Dallas. It also included Dallas partner Jonathan Whalen, Houston of counsel James Robertson, New York associate Kristen Poole, Houston associate Nathan Zhang and Denver associate Graham Valenta. Dallas partner Krista Hanvey advised on benefits; Dallas associate Michael Cannon advised on tax aspects; Washington, D.C. counsel Andrew Cline advised on antitrust aspects; and Houston partner Shalla Prichard advised on finance aspects.
Chapman recently led the team that represented Pioneer in its $7.5 billion, stock-for-stock acquisition of Parsley Energy in a year scarce on oil and gas deals and high on uncertainty amid the Covid-19 pandemic.
Vinson & Elkins and Alston & Bird advised DoublePoint. The V&E team was by led by Jim Fox, Doug McWilliams and Shay Kuperman, with assistance from Jackson O’Maley, David Bumgardner and Michael Zarcaro. Other key team members included Dan Komarek, Sydney Verner, Billy Vranish, Patrick Whelan, Daniel Wicoff, David Peck, Brian Russell, Tzvi Werzberger, Carter Olson and David Wicklund.
Alston & Bird’s team was comprised of Mitchell Griffith, Rob Vartabedian, Conrad Hester, Gaye Lentz and Nick Davis.
The deal was led internally at Pioneer by Mark Kleinman, general counsel, and Tom Murphy, corporate secretary.
As part of the transaction, the Irving-based publicly traded exploration and production company will issue about 27.2 million shares of common stock, in addition to $1 billion in cash, leaving Pioneer shareholders with 89% of the combined company and DoublePoint shareholders with approximately 11%. Pioneer will also assume approximately $900 million in debt and liabilities. The deal, which has already been unanimously approved by Pioneer’s board of directors, would be financed through a combination of cash on-hand and the company’s existing revolving credit facility.
DoublePoint has well-known backers that include Apollo Global Management, Quantum Energy Partners, Magnetar and GSO Capital Partners, and is led by the Double Eagle management team in partnership with Four Point Energy.
The deal has been structured as the acquisition of interests of a wholly owned DoublePoint subsidiary by a Pioneer subsidiary.