Exxon Mobil Corp. is on the cusp of acquiring Pioneer Natural Resources Co., edging closer to its most substantial takeover in over two decades.
According to an inside source, the oil giant is poised to become the dominant U.S. producer of shale oil.
This potential agreement, estimated to be worth $60 billion, is on the brink of completion barring any unforeseen complications.
The Wall Street Journal initially broke the news, marking it as a pivotal moment in the energy industry for 2023.
If finalized, this deal would rank as the world’s largest of the year, surpassing Pfizer Inc.’s $43 billion acquisition of Seagen Inc.
Also, it would represent Exxon’s most significant acquisition since its merger with Mobil Corp. in 1999, solidifying its position as the leading producer in the prolific U.S. oil basin.
Pioneer’s market value, closing at $214.96 per share, currently stands at $50.1 billion, making this potential takeover one of immense magnitude.
While the deal is advanced, there remains a possibility of it falling apart, as both Exxon and Pioneer have refrained from commenting on “market rumors,” as reported by Bloomberg.
If the acquisition proceeds, it would unite two major acreage holders in the Permian Basin of Texas and New Mexico, solidifying Exxon’s position as the basin’s largest producer.
With an anticipated daily output of approximately 1.2 million barrels, this would exceed the production of many OPEC nations.
This strategic move would also extend Exxon’s access to top-tier drilling locations, providing a long-term supply of low-cost crude well into the mid-21st century, further fueling its massive refinery network along the Gulf Coast.
The pending deal also draws attention to Pioneer’s future following CEO Scott Sheffield’s announcement of his retirement at year’s end, marking the end of an era for the company and the Permian Basin.
For Exxon, this acquisition offers an opportunity to secure its dominance in shale oil production after years of strategic consideration and financial recovery from the challenges of the pandemic.
CEO Darren Woods has emphasized that any potential mergers would be chosen carefully to create long-term value.