Exxon Mobil Corp. is reportedly on the brink of securing a purchase deal with Pioneer Natural Resources Co. an acquisition that could be worth approximately $60 billion and transform the U.S. oil landscape.
The deal could be finalized in the coming days, but it’s still possible that it might not happen, according to individuals privy to the matter, The Wall Street Journal reported.
Following its record-breaking profit in 2022, Exxon has been exploring opportunities to expand its presence in the West Texas shale, leveraging its abundant cash reserves. The purchase of Pioneer, which has a market capitalization of around $50 billion, could be Exxon’s most significant deal since its 1999 merger with Mobil.
A successful deal would secure Exxon’s dominance in the oil-rich Permian Basin, a region the company deems crucial to its growth strategy. The acquisition would surpass the U.S. oil industry’s most recent significant takeover — Occidental Petroleum’s 2019 acquisition of Anadarko Petroleum for about $38 billion.
Exxon CEO Darren Woods, who has seen the company through both high and low periods, could potentially shape his legacy with this deal. If successful, this would be Woods’ second major acquisition, following Exxon’s recent purchase of CO2 pipeline operator Denbury for $4.9 billion.
The purchase would grant Exxon access to vast West Texas acreage, considered the heart of the U.S. shale boom. Pioneer’s holdings in the Midland Basin, a part of the Permian Basin spanning West Texas and New Mexico, are seen as one of the largest collections of fertile oil land in the U.S.
With oil prices on the rise, Pioneer’s financial health has been improving, reducing its debt by over 20% since the end of 2021, according to FactSet.
The Exxon-Pioneer deal could potentially trigger a wave of consolidation within the shale industry, as companies grapple with a reduction in drilling locations and a shift from rapid growth to a more mature business model.
The oil giant’s move to purchase Pioneer, signals Exxon’s continued reliance on its traditional oil-and-gas business for the foreseeable future.
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