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Pioneer Surges 6% After Informal Exxon Talks

Pioneer Natural Resources (NYSE:PXD) shares have gained 6% so far on Monday following news reports that ExxonMobil is considering an acquisition of the pure-play shale producer in the Permian basin.

At 1:09 p.m. EST, Pioneer stock was trading up 6.13%, to $220.93, for a gain of over $12.77 on the day. 

On Friday, the Wall Street Journal broke a story citing unnamed sources close to the matter as saying that Exxon had held early informal talks about acquiring Pioneer as it seeks to increase its footprint in the U.S. shale patch. 

Such a deal, if it were to go through, would represent the biggest deal for Exxon since 1999, when Exxon and Mobil merged. 

In December, Exxon noted that it would earmark more than 70% of its CAPEX in “strategic developments” by 2027, including in the Permian basin.

Though talks are only information and there is no guarantee that Exxon would go through with an acquisition of Pioneer, the stock continued to gain momentum on Monday.

Pioneer Natural Resources’ market capitalization was $49 billion as of market close on Thursday. By midday Monday, its market cap was $51.92 billion. The company is the largest pure-play shale company in the country. 

In late February, Pioneer said in a statement that it was “not contemplating a significant business combination or other acquisition transaction”.

The Permian basin is an increasingly attractive venue for E&P companies as oil prices rise and bullish sentiment persists. News of informal talks between Exxon and Pioneer follow another deal last week in which Ovintiv agreed to buy EnCap Investments’ Permian assets for $4.3 billion. 

Pioneer’s Q4 2022 earnings report delivered a 1.37% earnings surprise, coming in at quarterly earnings of $5.91 per share, up from $4.58 per share a year ago, beating analyst expectations.

By Charles Kennedy for Oilprice.com

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