Introduction
As previously disclosed, on October 10, 2023, Pioneer Natural Resources Company, a Delaware corporation (the “Company” or “Pioneer”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Exxon Mobil Corporation, a New Jersey corporation (“ExxonMobil”), and SPQR, LLC, a Delaware limited liability company and a wholly-owned subsidiary of ExxonMobil (“Merger Sub”). On May 3, 2024, Merger Sub merged with and into Pioneer (the “Merger”), with Pioneer surviving the Merger as a wholly-owned subsidiary of ExxonMobil.
The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which was included as Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) by Pioneer on October 11, 2023 (Accession No. 0001193125-23-253935) and is incorporated herein by reference.
| Item 1.01 | Entry into a Material Definitive Agreement |
In connection with the consummation of the Merger, on May 3, 2024, Pioneer, ExxonMobil and Computershare Trust Company, N.A. (successor to Wells Fargo Bank, National Association), as trustee, entered into the First Supplemental Indenture to that certain Indenture (the “Indenture”), dated as of May 14, 2020, pursuant to which Pioneer issued its 0.250% Convertible Senior Notes due 2025 (the “Notes”). The First Supplemental Indenture provides that, as of the effective time of the Merger (the “Effective Time”), the right to convert each $1,000 principal amount of Notes into shares of common stock, par value $0.01 per share, of Pioneer (“Pioneer Common Stock”) was changed into a right to convert such principal amount of Notes into the number of shares of common stock, without par value, of ExxonMobil (“ExxonMobil Common Stock”) that a holder of a number of shares of Pioneer Common Stock equal to the Conversion Rate (as defined in the Indenture) immediately prior to the Effective Time would have been entitled to receive upon the consummation of the Merger; provided that, at and after the Effective Time (a) Pioneer will continue to have the right to determine the form of consideration to be paid or delivered, as the case may be, upon conversion of the Notes in accordance with the terms of the Indenture and (b) any amount payable in cash upon conversion of the Notes in accordance the terms of the Indenture will continue to be payable in cash. As described below, upon the consummation of the Merger, each then-outstanding share of Pioneer Common Stock was converted into the right to receive 2.3234 shares of ExxonMobil Common Stock (the “Exchange Ratio”), resulting in an adjusted initial Conversion Rate of 25.4503 shares of ExxonMobil Common Stock per $1,000 principal amount of Notes. As of the date hereof, approximately $450 million aggregate principal amount of Notes remains outstanding.
The foregoing description of the First Supplemental Indenture does not purport to be complete and is qualified in its entirety by reference to the First Supplemental Indenture, which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 1.02 | Termination of a Material Definitive Agreement. |
In connection with the consummation of the Merger, on May 3, 2024, Pioneer terminated all outstanding lender commitments, including commitments of the lenders to issue letters of credit, under that certain Credit Agreement, dated as of October 24, 2018, by and among Pioneer, as borrower, Wells Fargo Bank, N.A., as administrative agent, and the other agents and lenders party thereto from time to time, as amended, supplemented, or otherwise modified from time to time (the “Credit Agreement”). In connection with the termination of the Credit Agreement, on May 3, 2024, all outstanding obligations for principal, interest and fees under the Credit Agreement were paid off in full and any letter of credit or other obligations under the Credit Agreement were released or cash collateralized.
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
The information set forth in the Introduction of this Current Report on Form 8-K is incorporated by reference into this Item 2.01. At the Effective Time, each share of Pioneer Common Stock outstanding immediately prior to the Effective Time, other than certain excluded shares held by Pioneer as treasury stock or owned by ExxonMobil or Merger Sub, was converted into the right to receive 2.3234 shares of ExxonMobil Common Stock (together with cash proceeds from the sale of fractional shares, the “Merger Consideration”).
