(Reuters) – Exxon Mobil (NYSE:) is in advanced talks to acquire Pioneer Natural Resources (NYSE:) in a deal that could value the Permian Basin producer at about $60 billion, according to people familiar with the matter.
A deal would be Exxon’s biggest acquisition since its $81 billion deal for Mobil in 1998 and could deepen the oil major’s position in the country’s most lucrative oil patch.
Here is what Wall Street has to say on the likely deal.
BILL SMEAD, CHIEF INVESTMENT OFFICER OF SMEAD CAPITAL MANAGEMENT
“I can’t imagine any deal is going to go for less than $65 billion, considering Pioneer is currently trading around $50 billion . . . This is the beginning of a massive consolidation in the industry.”
PETER MCNALLY, GLOBAL SECTOR LEAD FOR INDUSTRIALS MATERIALS AND ENERGY AT THIRD BRIDGE
“From the Exxon Mobil perspective, U.S. production volumes have actually been negative for the past four quarters – a stretch not seen since 2018 . . . it may prove to be more efficient to buy the production growth through an acquisition than to build it organically by adding more rigs and crews.”
SCOTT HANOLD, ANALYST, RBC CAPITAL MARKETS
“PXD has one of the most envious asset based in the Permian Basin, so it would be a tactical long-term opportunity. XOM’s endeavor to acquire large U.S. producers has not been widely seen as successful by investors, with many looking at the acquisition of XTO being not executed very well. The cultures tend to differ quite at bit between US E&Ps and larger more integrated entities.”
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