Shares of Pioneer Natural Resources surged more than 10 percent Friday following reports the shale producer is nearing a megadeal to be acquired by ExxonMobil.
The potential transaction, which would bolster ExxonMobil’s holdings in the Permian Basin in Texas and New Mexico, could be announced “in the coming days” and be worth $60 billion, reported the JPMorgan, citing people familiar with the matter.
The newspaper also said it was “still possible” there would be no deal.
Pioneer’s output of 707,000 barrels per day of oil equivalent amount to just over a quarter of ExxonMobil’s production, but Dallas-based Pioneer is known for an exceptionally large acreage position in the Permian.
A deal could allow ExxonMobil to significantly boost oil and natural gas output from the petroleum basin, which is well positioned to provide key raw materials to ExxonMobil petrochemical assets in the Gulf Coast that the oil giant has expanded.
An ExxonMobil spokeswoman declined comment.
While today’s oil prices are above the level at which ExxonMobil usually undertakes big deals, “we think the stars could be aligning on several fronts, which make the deal plausible,” said a note from JPMorgan Chase.
The analysis noted that Pioneer’s shares have lagged the upward movement in 2023.
Also, the company’s chief executive Scott Sheffield has announced he will retire at the end of the year.
“This would be a fitting way to conclude his tenure in what appears to be a shareholder-friendly manner,” JPMorgan said.
Near 1540 GMT, Pioneer shares jumped 10.2 percent, while ExxonMobil was down 2.4 percent.