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Exxon Mobil's $60 Billion Deal for Rival To More Than Double Permian Basin Land Holdings

Energy Giant To Trim Costs With Improved Drilling Technology in Bet on Fossil Fuels
Pioneer Natural Resources had this more than 1.1-million-square-foot campus in the Dallas area custom-built for its headquarters in 2019. (CoStar)
Pioneer Natural Resources had this more than 1.1-million-square-foot campus in the Dallas area custom-built for its headquarters in 2019. (CoStar)
CoStar News
October 11, 2023 | 10:24 P.M.

Exxon Mobil Corp.'s nearly $60 billion acquisition of rival Pioneer Natural Resources Co. is expected to more than double its land holdings in the Permian Basin and allow the trimming of about $2 billion in costs.

The all-stock $59.5 billion deal announced Wednesday adds property in the basin, which stretches from eastern New Mexico and into most of West Texas and where oil and gas is pumped out of the ground using tech-savvy improved fracking methods. The deal marks a commitment to fossil fuels by the largest U.S.-based energy company as oil and gas prices surge.

Once the deal closes by mid-2024, Exxon Mobil’s production volume from the Permian Basin would more than double to 1.3 million barrels of oil equivalent per day, an amount that's expected to increase to 2 million barrels of oil equivalent per day in 2027.

Pioneer's 2,000 office and field employees working at its headquarters in Irving, Texas, or in Midland, Texas, are expected to be offered jobs with Exxon Mobil as part of the deal. Pioneer's headquarters totaling more than 1.1 million square feet at 777 Hidden Ridge Drive in Irving, about 14 miles northeast of downtown Dallas, is expected to remain open for the next two years, a spokeswoman for Exxon Mobil told CoStar News.

It is unclear what might happen to the campus where Pioneer is committed to a long-term lease beyond the two-year window. An investment group led by real estate manager PRP purchased the 10-story campus for $584.2 million, or about $519 per square foot, in 2019 shortly after Pioneer moved into it. Then in 2020, Florida-based Benderson Development bought the land underneath Pioneer's headquarters for $218 million.

PRP and Benderson Development didn't immediately respond to CoStar News seeking a comment about Exxon Mobil's acquisition of Pioneer and the effect it could have on their real estate investments.

Once the Pioneer acquisition closes, it will leave Irving with one less Fortune 500 headquarters calling the city its home. Earlier this year, Exxon Mobil relocated its headquarters from Irving to the greater Houston area where it owns a 385-acre campus in Spring, Texas, about 27 miles north of downtown Houston. Exxon Mobil sold its Irving campus to Capital Commercial Investments, based in Austin, Texas, at the end of 2022.

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The energy giant plans to relocate next year to the Houston suburb of Spring, Texas.
Candace Carlisle
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The Pioneer deal is Exxon Mobil's biggest acquisition in more than two decades.

In an interview with Bloomberg TV on Wednesday, Exxon Mobil Chairman and CEO Darren Woods said job cuts tied to the acquisition would be "fairly minimal." Pioneer CEO Scott Sheffield, who also was interviewed by Bloomberg TV in the same segment, said he expects more consolidation to come in the industry.

"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,” Woods said in a statement.

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