Exxon Mobil May Acquire Shale Driller Pioneer

Exxon Mobil, One of the Largest Oil and Gas Companies in the World, Held Preliminary Discussions with Pioneer Natural Resources.

The discussion is about a potential acquisition of the shale oil producer in the United States. This was reported by the Wall Street Journal this Friday, citing people with knowledge of the matter.

The discussions between the two companies regarding a potential deal were informal, the paper said, adding that executives from Exxon discussed a possible partnership with at least one more company. Both companies declined to comment on the news.

Exxon views Pioneer as a priority target to give “use to its unexpected profits,” the paper stated. The talks may not necessarily lead to formal negotiations, and Exxon may pursue another company.

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Exxon Mobil and Its Profits

Last year, Exxon posted a record revenue of $55.7 billion due to soaring oil and gas prices and ended the year with $29.6 billion in cash and equivalents. The largest oil producer in the U.S. signaled this week that its first-quarter operating profits fell about 25% compared to the fourth quarter of last year, due to falling prices of gas and oil and rising refinery maintenance costs.

Pioneer Natural Resources and Its Shale Production

Pioneer is the third-largest oil producer after Chevron Corp and ConocoPhillips in the main shale basin in the U.S. If Exxon acquires Pioneer, it will gain access to one of the most valuable oil and gas fields in the United States. The acquisition would also strengthen Exxon’s position in the shale production market in the U.S.

However, Pioneer denied a recent media report six weeks ago that it was considering an acquisition of the smaller rival Range Resources Corp. Both companies denied that there were discussions about a potential merger.

The acquisition of Pioneer by Exxon Mobil would be a big deal for both parties. Exxon would gain access to one of the most valuable oil and gas fields in the United States, and Pioneer would have a strong and experienced partner in the U.S. shale production market. Discussions between the two companies are still informal and may not necessarily lead to an agreement, but the acquisition of Pioneer by Exxon seems to be a real possibility.