Deal Insight
Pioneer sells Delaware Permian assets to Continental for US$3.3 billion
Report summary
Continental Resources US$3.25 billion acquisition of Pioneer Natural Resources Delaware Basin assets provides entry into the Permian Basin. The purchase price represents a discount to our base case NPV10 valuation, but the initial market reaction was poor. While expansion into two new oil basins this year convolutes Continental's strategy, there are clear benefits and upside to this transaction. Flowing production is additive to Continental's already strong free cash flow profile, and current prices and exploration potential provide clear upsides. The deal is not without risk though. Financing the deal with debt while remaining unhedged on oil elevates commodity price risk. The rationale for Pioneer is more straightforward. The Delaware Basin was non-core to its Midland Basin centric focus. Directing disposal proceeds to the balance sheet further facilitates already strong compliance with investor demands.
Table of contents
- Executive summary
- Transaction details
- Upstream assets
- Deal analysis
- Upsides and risks
- Strategic rationale
- Oil & gas pricing and assumptions
Tables and charts
This report includes 8 images and tables including:
- Executive summary: Table 1
- Completed wells by original operator (2016-2021)
- Upstream assets: Table 1
- Deal analysis: Table 1
- Deal analysis: Table 2
- Deal analysis: Table 3
- Oil & gas pricing and assumptions: Table 1
- Oil & gas pricing and assumptions: Table 2
What's included
This report contains:
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