Is Exxon buying Pioneer Natural Resources?

on Apr 10, 2023
  • Exxon held informal talks with Pioneer over a possible takeover.
  • It'll be its largest acquisition since Mobil Corp in 1999.
  • Pioneer Natural Resources stock is up about 12% this morning.

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Pioneer Natural Resources Co (NYSE: PXD) jumped 12% this morning following a report that Exxon Mobil Corp (NYSE: XOM) may be interested in buying the hydrocarbon exploration company.

Here’s what we know so far

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According to the Wall Street Journal, Exxon has held informal talks with the Texas-based firm over a possible acquisition. It’s been on a lookout for a possible takeover after seeing record profit in 2022.

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Nonetheless, the said report confirmed that such a deal, if it ever realizes, will take until the back half of this year or may even be pushed to the next year to be announced. Anonymous sources also told the WSJ:

There’s no formal process between Exxon and Pioneer. Exxon executives have discussed a potential tie-up with at least one other company.

Exxon stock is also in the green today.

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What’s in it for Exxon Mobil Corp?

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At writing, Pioneer Natural Resources Co has a market cap of over $50 billion. If Exxon indeed proceeds with this acquisition, it’ll be its largest since Mobil Corp in 1999.

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What’s also noteworthy is that the takeover will help Exxon expand its footprint in the Permian Basin of West Texas and New Mexico that the oil giant expects to be pivotal for its growth plans.

In February, the U.S. fracking giant reported weaker-than-expected revenue for its fiscal fourth quarter. Still, a DBS analyst in a recent note reiterated his $271 price target on Pioneer stock that represents more than a 20% upside from here.

Remember that it’s a dividend stock that currently pays a lucrative yield of 12.19%.

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