Pioneer Natural stock loses after takeover spree

Stocks of Pioneer Natural Resources (NYSE: PXD) fell more than 6% as the US oil producer surprised investors by taking over rival DoublePoint Energy for $ 6.4 billion months after a big deal, with the sector getting on still recovering from last year's crash. Pioneer's fourth multi-billion deal this year comes at a time when investors in the shale patch have urged producers to focus on cash flow and shareholder returns rather than spending to grow as the Demand remains low due to the COVID-19 pandemic. In January, Pioneer completed the $ 4.5 billion purchase of Parsley Energy (NYSE: PE) for one of the largest positions in the Permian Basin, the largest slate field in the United States. RBC Capital Markets said it was surprised that Pioneer made such a large acquisition after Parsley Energy and that the reasons for doing so appeared to be partly opportunistic and partly defensive. The stock-and-cash deal for DoublePoint Energy, the largest privately held US oil producer since 2011, increases Pioneer's stake in Permian to more than 1 million net acres. KeyBanc downgraded Pioneer to Sector Weight, saying it was "one of the highest purchase prices we've seen in recent years, and it was surprising given that it's largely untapped and a bit watering down for the average acreage." -Quality from PXD. " DoublePoint Energy will add 97,000 acres to Pioneer's holdings in the Permian Basin, and analysts at Cowen & Co praised the deal, saying it "undoubtedly fits like a glove in PXD's Midland Basin Acreage and ... the expected variable dividends per share for the year Increased in 2022. " Morgan Stanley (NYSE: MS) said the two companies' acreage overlap provides industrial logic to the deal and viewed the deal as positive for Pioneer's free cash flow. Pioneer's shares fell 6.1% to $ 154.52, slightly more than the 3% decline in oil prices.