Exxon Mobil eyes potential acquisition of Pioneer's shale driller

April 7, 2023

minute read

While the oil giant searches for a landmark deal in the shale region, Exxon Mobil Corp. has reportedly started early conversations with Pioneer Natural Resources Co. about a potential takeover of the American fracking powerhouse.

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As of now, there have been no formal discussions between the two companies about a potential deal, according to the people. Exxon, however, is flush with cash after posting record profits in 2022 and, according to people familiar with the company's plans, has been exploring options that could reshape a large swath of the U.S. oil and gas industry, pushing Exxon deeper into the West Texas shale field as well.

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At least one other company has been discussed by Exxon executives as a potential partner in a possible tie-up, according to people familiar with the matter. It was noted by some individuals that there is no formal process between Exxon and Pioneer.

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Any deal, if it were to happen, would likely not be finalized until later this year or next year, according to the people, and talks may not materialize into formal negotiations at all, or Exxon may choose to pursue another company instead. However, they said that Exxon is on the hunt for a seismic deal to put its windfall profits to use and has identified Pioneer of Dallas as one of the top targets for a seismic deal.

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Exxon’s likely largest acquisition since this mega-merger with Mobil Corp. in 1999 would have been the acquisition of Pioneer Energy, which has a market cap of around $49 billion. With the acquisition, Exxon would gain a dominant position in the oil-rich Permian Basin of West Texas and New Mexico, a region that Exxon has stated is crucial to its growth plans.

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It is likely that an acquisition of Pioneer would put the company ahead of the most recent blockbuster in the U.S. oil industry, Occidental Petroleum Corp., which purchased Anadarko Petroleum Corp. for approximately $38 billion in 2019, and Exxon's 2010 acquisition of XTO Energy Inc. for around $30 billion.