Exxon in $60 billion stock acquisition of shale competitor Pioneer -sources.

Exxon Mobil is expected to announce its acquisition of Pioneer Natural Resources for approximately $60 billion, a move that would make it the largest U.S. oilfield operator. The deal is reportedly a pure stock offer valued at more than $250 a share for Pioneer. The acquisition would cement Exxon’s position as a dominant player in the Permian Basin shale field and its oilfield infrastructure. Despite the heavy scrutiny the deal is expected to face, antitrust experts believe it stands a good chance of completion due to the companies’ small fraction of the global oil and gas market. Exxon’s decision to focus on heavy oil amid increasing climate concerns has paid off financially, with the company earning a record $56 billion profit last year after facing losses during the COVID-19 pandemic.

Pioneer Natural Resources has emerged as one of the most successful oil companies in the wake of the shale revolution, with rock-bottom production costs averaging around $10.50 per barrel of oil and gas. Under CEO Scott Sheffield, Pioneer has experienced rapid growth through multiple acquisitions. The planned purchase by Exxon would surpass Shell’s 2016 acquisition of BG Group, making it the largest deal in the energy industry this year. Exxon’s share price has rebounded since its slump in early 2020, with shares recently reaching an all-time high of $120. The company has set aside $30 billion in cash in anticipation of deals as it looks to expand its portfolio and recover from recent losses.

In July, Exxon agreed to a $4.9 billion all-stock deal for Denbury Inc., a small U.S. oil firm, in an effort to bolster its low-carbon business. This acquisition, originally planned as an all-cash bid, reflects both Denbury’s increased market value during the negotiations and investors’ desire to participate in any potential upside for Exxon’s stock. With this latest acquisition of Pioneer Natural Resources, Exxon is strategically positioning itself for a decade of low-cost production and a stronger presence in the Permian Basin. The deal is expected to face regulatory scrutiny but is likely to succeed due to the companies’ relatively small market share. Exxon’s investment in heavy oil has proven to be financially lucrative, with the company rebounding from its losses and earning record profits last year. As it focuses on expanding its portfolio and recovering from recent setbacks, Exxon has set aside billions in cash for potential future deals.

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