{"id":69568,"date":"2023-10-06T15:37:30","date_gmt":"2023-10-06T19:37:30","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/pioneer-natural-other-permian-stocks-rally-on-news-an-exxon-deal-may-be-next\/"},"modified":"2023-10-06T15:37:33","modified_gmt":"2023-10-06T19:37:33","slug":"pioneer-natural-other-permian-stocks-rally-on-news-an-exxon-deal-may-be-next","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=69568","title":{"rendered":"Pioneer Natural, other Permian stocks rally on news an Exxon deal may be next"},"content":{"rendered":"
\n

Shares of Pioneer Natural Resources Co. and of several peers focusing on West Texas\u2019s Permian basin rallied Friday after a report that oil giant Exxon Mobil Corp. has its eyes on Pioneer, one of the largest exploration and production companies in the area. <\/p>\n

Pioneer
\n PXD,
\n +10.74%<\/bg-quote>
\n shares jumped more than 10%, while shares of Occidental Petroleum Corp.
\n OXY,
\n +3.63%<\/bg-quote>
\n rose 3%, Devon Energy Corp. shares
\n DVN,
\n +2.60%<\/bg-quote>
\n gained 6% and Diamondback Energy Inc.\u2019s stock
\n FANG,
\n +4.60%<\/bg-quote>
\n climbed 5%. Exxon
\n XOM,
\n -1.18%<\/bg-quote>
\n shares dropped about 1%, and the SPDR Energy Select Sector ETF
\n XLE
\n rose 1%. <\/p>\n

\n

The Wall Street Journal late Thursday reported that Exxon was near a roughly $60 billion \u201cblockbuster\u201d deal to buy Pioneer. The companies have not commented. <\/p>\n

Citi analyst Alastair Symes said that the \u201clogic of consolidation in the highly fragmented Permian shale remains compelling,\u201d with significant gains from economies of scale.<\/p>\n

Don\u2019t miss:<\/strong> These oil stocks are looking cheap as Exxon Mobil reportedly mulls a bid for Pioneer<\/p>\n

\u201cThis particular combination would create the largest Permian player and, even with a modest deal premium, we estimate can generate a positive return on investment,\u201d Symes said. <\/p>\n

Symes estimated that Pioneer is No. 2 largest owner of resources in the Permian and Exxon\u2019s the fourth, and a merger \u201celevating the combination just ahead of [Chevron Corp.
\n CVX,
\n -0.55%<\/bg-quote>
\n ] as the largest resource-owner in the basin.\u201d<\/p>\n

A high percentage of Pioneer\u2019s Permian holdings are Tier 1, or best quality reservoirs, \u201cthat would likely command a premium.\u201d Given Pioneer\u2019s size, \u201cthere are likely not many suitors, and certainly none with the currency (the equity valuation premium) that [Exxon] has,\u201d he said. <\/p>\n

Exxon, for its turn, has invested around $28 billion in its downstream operations over the past decade, and its refineries, petrochemical plants, and liquified natural gas export facilities \u201call need to be fed with hydrocarbons and adding Pioneer Natural Resources at this point in Exxon\u2019s history would offer both speed and scale,\u201d Third Bridge analyst Peter McNally said. <\/p>\n

\u201cIntegrating both Exxon and Pioneer\u2019s upstream volumes with the scale of the downstream would bring economic benefits to both,\u201d he said. <\/p>\n

J.P. Morgan analysts, led by Arun Jayaram, said that oil giants such as Exxon historically have shied away from mergers and acquisitions while oil prices are on the upswing, but \u201cthe stars could be aligning on several fronts\u201d for a deal with Pioneer. <\/p>\n

Pioneer shares have lagged oil-futures prices, and trading at a discount. Chief Executive and founder Scott Sheffield is set to retire at year-end, and a deal would be \u201ca fitting way to conclude his tenure in what appears to be a shareholder friendly manner.\u201d<\/p>\n

Moreover, \u201cthe U.S. shale industry is currently engaged in an M&A wave,\u201d the J.P. Morgan analysts said. The wave has not only included independent producers, but also larger companies such as Chevron, with its deal for Noble Energy and PDC Energy as well as ConocoPhillips\u2019
\n COP,
\n +2.41%<\/bg-quote>
\n and Shell Plc
\n SHEL,
\n +2.99%<\/bg-quote>
\n 2021 deal in the Permian. <\/p>\n

\u201cWe think this would represent the primary motivation for a deal given the magnitude of [Pioneer\u2019s] undrilled inventory,\u201d they said. <\/p>\n

Exxon shares have dropped more than 2% so far this year, contrasting with an advance of about 11% for the S&P 500. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of Pioneer Natural Resources Co. and of several peers focusing on West Texas\u2019s Permian basin rallied Friday after a report that oil giant Exxon Mobil Corp. has its eyes on Pioneer, one of the largest exploration and production companies in the area. Pioneer PXD, +10.74% shares jumped more than 10%, while shares of Occidental […]<\/p>\n","protected":false},"author":1,"featured_media":69569,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-69568","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nPioneer Natural, other Permian stocks rally on news an Exxon deal may be next | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Shares of Pioneer Natural Resources Co. and of several peers focusing on West Texas\u2019s Permian basin rallied Friday after a report that oil giant Exxon\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=69568\" \/>\n<meta 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