Cody Campbell, co-founder of Double Point Energy, in Midland, Texas. August 2018.
© 2018 BLOOMBERG FINANCE LPPioneer PXD +1.4% Natural Resources on Thursday night announced the acquisition of DoublePoint Energy for $6.4 billion. The deal is for 100,000 acres, in the core of the Permian basin, which are currently producing nearly 100,000 barrels per day.
“On the ground level, out in the field it makes an incredible amount of sense,” says Cody Campbell, co-CEO of DoublePoint. The acreage, in the Midland Basin portion of the greater Permian basin, is contiguous with much of Pioneer’s existing holdings — enabling Pioneer to now engineer longer horizontal wells from fewer drilling pads, utilizing the same pipeline and water systems in which Pioneer has already invested. Campbell, 39, says he will be holding on to the several hundred million dollars in Pioneer stock that he’ll receive in the deal. “We had talked to a lot of companies, it was well known that we had a high quality asset.”
Pioneer, which says it intend to extract $175 million a year in synergies, paid a premium for the right fit. The deal terms reflect a rough valuation of $30,000 per flowing barrel of current production, plus about $40,000 per acre for undeveloped land — pricey compared with recent deals.
