(CTN News) – An anonymous source familiar with the matter told The Wall Street Journal that ExxonMobil has been in conversation with industry sources about the possibility of acquiring Pioneer Natural Resources, the world’s largest pure-play shale producer.
There is a large likelihood that Exxon will increase production in the Permian basin during the coming years in order to further strengthen its position in the U.S. shale patch.
The company has been saying for years that it will not invest in any other areas or areas except the Permian basin.
According to the latest corporate plan that Exxon released in December, more than 70% of the capital investments it will make by 2027 will go into strategic developments in the US, including the Permian Basin, Guyana, Brazil, as well as LNG projects around the world.
The market capitalization of Pioneer Natural Resources was $49 billion as of the close of business on Thursday. Pioneer Natural Resources is one of the biggest oil producers in the Permian region and is one of the largest pure-play players in the US.
The Journal’s sources say that Exxon and Pioneer are only in informal talks at this stage, which means there is no guarantee that the informal talks will lead to formal negotiations at some point in the future.
Additionally, it has been reported that has been discussing a possible acquisition with at least one other company, and that the U.S. supermajor may decide to pursue such a deal.
Earlier this month, Pioneer Natural Resources issued a brief statement saying in a nutshell that “the Company does not intend to pursue a significant business combination or other acquisition transaction at this time.”.
The bottom line is that, if Exxon and Pioneer were to proceed to formally negotiate and potentially reach a deal on an Exxon acquisition, it would be the biggest acquisition for the giant U.S. oil company since the merger of Exxon and Mobil in 1999 that created the oil giant.
As oil prices have increased and companies have been looking for primary drilling locations in the Permian, the shale patch has recently seen an increase in deal-making activity due to the increasing demand for drilling spots.
Earlier this week, Ovintiv agreed to buy $4.3 billion worth of untapped oil and gas assets from EnCap Investments that were located in the Permian Basin.
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