Pioneer Natural falls after fourth multi-billion shale deal of the year 

© Reuters. FILE PHOTO: The solar is viewed within the abet of a crude oil pump jack within the Permian Basin in Loving County

(Reuters) -Shares of Pioneer Natural Sources (NYSE:) declined more than 6% as the U.S. oil producer’s $6.4 billion acquisition of rival DoublePoint Energy months after a astronomical deal took investors without warning, with the sector aloof recovering from final year’s break.

Pioneer’s fourth multi-billion shale deal this year comes as investors within the shale patch have called on producers to point of interest on money drift and shareholder returns, other than spending to grow, as ask remains low ensuing from the COVID-19 pandemic.

In January, Pioneer closed its $4.5 billion, all-stock possess of Parsley Energy (NYSE:), giving it one of the ideal positions within the Permian Basin, the head U.S. shale self-discipline.

RBC Capital Markets acknowledged it used to be taken aback Pioneer made the kind of astronomical acquisition after Parsley Energy and that the reason looked to be segment opportunistic and segment defensive.

The stock-and-money deal for DoublePoint Energy, the ideal privately-held U.S. oil producer since 2011, will increase Pioneer’s holdings within the Permian to more than 1 million bag acres.

KeyBanc downgraded Pioneer to “sector weight” and acknowledged it used to be “one of one of the best possess prices now we have viewed in years, and it used to be magnificent given the reality that it is basically undeveloped and a microscopic dilutive to PXD’s moderate acreage quality.”

DoublePoint Energy will add 97,000 acres to Pioneer’s holdings within the Permian Basin and analysts at Cowen & Co praised the deal, announcing it “indubitably fits treasure a glove inner PXD’s Midland Basin acreage and…will increase expected per share variable dividends in 2022.”

Morgan Stanley (NYSE:) acknowledged the acreage overlap of the 2 companies presents industrial good judgment for the transaction and considered the deal as accretive to Pioneer’s free money-drift.

Pioneer’s shares fell 6.1% to $154.52, slightly more than the three% decline in oil prices.

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