(Bloomberg) — Exxon Mobil Corp. is in talks to acquire Pioneer Natural Resources Co., according to a person familiar with the matter, nearing its largest takeover in more than two decades as the energy giant seeks to become the dominate US producer of shale oil.
Most Read from Bloomberg
An agreement could be worth as much as $60 billion and may be completed in the coming days provided there are no complications, according to the Wall Street Journal, which first reported the talks on Thursday.
At that size, the deal would potentially be the world’s largest this year, surpassing pharmaceutical giant Pfizer Inc.’s $43 billion acquisition of cancer-drug maker Seagen Inc. announced in March. It would also be Exxon’s biggest acquisition since merging with Mobil Corp. in 1999, and would make the energy giant the top producer in the most prolific US oil basin.
Pioneer shares closed at $214.96 each on Thursday, valuing the company at $50.1 billion.
Though advanced, the transaction could still fall apart, the person said. Responding to requests for comment from Bloomberg, both Exxon and Pioneer said they don’t comment on “market rumors.”
Read More: Public Shale Mergers in Favor After Permian Deal, Analyst Says
A deal with Pioneer would unite two of the biggest acreage holders in the Permian Basin of Texas and New Mexico, making Exxon far and away the oil field’s biggest producer with an output of about 1.2 million barrels a day — more than many OPEC nations. It would also extend Exxon’s inventory of top-tier drilling locations in the basin by decades, providing low-cost, low risk crude well beyond 2050 to feed its giant refinery network on the Gulf Coast.
Attention has been focused on the future of Pioneer since founder and Chief Executive Officer Scott Sheffield said in April he planned to retire at year’s end. Sheffield has worked in the Permian since the 1970s and is credited as an architect of the shale boom that made the US an oil powerhouse.
Read More: Pioneer CEO Sheffield to Retire After Building Shale Giant
Exxon has been on the lookout for acquisitions in the Permian for years but has struggled with timing.
The company’s finances took a hit during the pandemic as oil prices plunged and as it ramped up capital spending on large global projects, forcing Exxon to borrow billions of dollars to pay shareholder dividends.
After pulling back on spending, cutting costs and reaping the benefits of pandemic-era investments, Exxon’s profits surged to a record $59 billion in 2022. The stock, meanwhile, gained more than 80% last year, providing the financial firepower for a potential era-defining deal with Pioneer.
Exxon’s CEO Darren Woods told investors in July the company continued to review potential M&A, but would remain “picky” and focused on creating value.
–With assistance from Shoko Oda, Mitchell Ferman and Joe Ryan.
(Updates with original reporting in first through fifth paragraphs.)
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P.