Pioneer Natural shares were rising sharply Monday.
Spencer Platt/Getty Images
Pioneer Natural Resources
was surging Monday after The Wall Street Journal reported that
Exxon Mobil
has held preliminary talks with the fracker about a possible acquisition.
The Journal, citing people familiar with the matter, reported that Exxon (ticker: XOM) has held informal discussions with
Pioneer Natural
(PXD) about a potential acquisition. Any possible deal wouldn’t come together until the end of the year, and it’s possible nothing comes from the discussions at all, according to the Journal.
Exxon told Barron’s that it doesn’t comment on market rumors or speculation. Barron’s has also reached out to Pioneer for comment.
Since the stock market was closed in observance of Good Friday last week, shares of the shale driller were surging as investors got their first chance to trade on the news. Shares of Pioneer Natural jumped 7.4% to $223.60. The stock was on pace for its largest percent increase since Dec. 4, 2020, when it rose 8.27%. The stock was the third-best performer on the
S&P 500
Monday.
Wells Fargo analyst Roger Read said in a research note that “with one of the largest and best acreage positions within the Permian Basin, merging with PXD could make strategic sense for many companies desiring a larger Permian footprint.”
The Permian Basin is an oil and gas producing area in West Texas. According to Pioneer Natural, some estimates say the resources deep below the Permian Basin’s surface “could rival the supply of what’s now considered the world’s largest oilfield in Saudi Arabia,” and the company has made the decision to become a “Permian pure-play company.”
Pioneer is scheduled to report first-quarter earnings on May 3. Mizuho analyst Nitin Kumar, who rates the stock as a Buy with a $265 price target, wrote in a research note last week that the company “is seeing no further increases in service costs due to inflationary pressures. However, they are not planning for any decreases in costs yet either.”
Pioneer stock has fallen 2.9% this year.
Write to Angela Palumbo at [email protected]
Read the full article here