ExxonMobil Eyes Takeover of Shale Fracker Pioneer Natural Resources

Shares of Pioneer Natural Resources (PXD) are jumping on a report ExxonMobil (XOM) has had preliminary discussions to purchase the shale fracker, in what could become the biggest acquisition for the oil giant in more than two decades.

Talks have been informal so far, the Wall Street Journal reported Friday, and ExxonMobil has also discussed a deal with at least one other company.

A takeover of Pioneer, which has a market capitalization of $49 billion, would be the biggest for the oil giant since Exxon and Mobil merged in 1999. It would give ExxonMobil a dominant position in the key Permian Basin oil patch in Texas and New Mexico, a region it has indicated it wants to expand in. The company has been looking to make an acquisition in the Permian Basin for months, people familiar with the matter said.

‘We Leaned In’

ExxonMobil is flush with cash after posting a record profit of $55.7 billion in 2022, as the firm focused more on drilling while rivals turned their attention toward other energy projects.

The “counter-cyclical investments we made before and during the pandemic provided the energy and products people needed as economies began recovering and supplies became tight,” noted CEO Darren Woods in the company’s earnings report. “We leaned in when others leaned out,” he added.

Shares of Pioneer Natural Resources rose 5%, while those of ExxonMobil were fractionally lower. Year-to-date, shares of the former are languishing 3%, while those of the latter are up 4%.