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Which Is The Best Shale Giant To Buy This Christmas?

These monthly 'Intelligent Investor' deep dives into high-value energy stocks are now included in all Global Energy Alert subscriptions. If you aren't already a member, make sure you sign up today!

U.S. shale drilling companies have become noteworthy for a couple of things this year. The first has come to be known as capital restraint and means essentially the companies no longer allocate capital for double-digit production growth annually. Instead, they have plowed the excess capital that has flowed into their coffers from higher oil and gas prices into debt reduction, share repurchase, and higher dividends.

The second is their focus on gaining market share and scale through acquisition and “bolt-on” acreage - acreage that complements existing acreage footprint in a given area - purchases. Focusing on the best plays, like the Permian basin, there has been a lot of activity of this type in this area over the last year. Large multi-billion dollar companies have chosen to merge with larger rivals to form a combined enterprise best suited to deliver shareholder returns in the coming years. Thankfully for shareholders, most of these mergers have been stock-swaps that led to no new debt or have been done with cash on the books.

The two companies we will be comparing this month have both been active acquirers since the oil crash of 2020. A pure-play Permian driller, Pioneer Natural Resources, (NYSE:PXD) has merged with privately-held DoublePoint Energy,…

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