ExxonMobil Explores Acquisition Of Pioneer Natural Amid Bid To Dominate Permian Basin

Exxon Mobil Corp. XOM is reportedly in early stage discussions with Pioneer Natural Resources Co. PXD about a potential acquisition, the Wall Street Journal reported Friday, citing people close to the matter.

The talks, which have been informal thus far, could transform the U.S. oil and gas industry and strengthen Exxon's presence in West Texas shale.

Exxon executives have considered a partnership with at least one other company, the report said, that no formal negotiations are currently underway with Pioneer. It is possible that the discussions may not lead to a formal agreement or that Exxon may ultimately choose to pursue another target.

If a deal were to be reached between Exxon and Pioneer, it likely would not materialize until late this year or sometime next year, the report said.

Read also: A Bull Case For Marathon Petroleum As Margins For Refining Become More Profitable

Pioneer, which boasts a market cap of $48.29 billion, would be Exxon's most significant acquisition since its merger with Mobil Corp in 1999. The Journal noted a Pioneer acquisition would solidify Exxon's dominance in the oil-rich Permian Basin of West Texas and New Mexico, an area the company considers crucial to its growth strategy.

An acquisition of Pioneer would also surpass other major deals in the U.S. oil industry, the report said, including Occidental Petroleum Corp.'s OXY 2019 purchase of Anadarko Petroleum for $38 billion and Exxon's 2009 acquisition of XTO Energy for $41 billion, which included about $10 billion in XTO debt.

Read next: Wall Street Analysts Raise Their Oil Price Forecasts After Shocking Supply Cuts By OPEC+

Photo via Shutterstock.