Shares of Pioneer Natural Resources (PXD) are jumping on a Wall Street Journal report that Exxon Mobil (XOM) is looking to buy the shale driller in a deal valued around $60 billion. The report states that the deal could be announced in the coming days, though cautions it could still not happen. Yahoo Finance Live takes a closer look at what the deal would mean for the energy sector.
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SEANA SMITH: Let's take a look at some of the individual movers here at Pioneer shares. We got to talk about that a huge move on reports that ExxonMobil is moving closer to potentially buy the shale drillers is according to various media reports. You're looking at a jump of nearly 8%.
Now the takeover could be up to $60 billion and could be ready to close in the next several days. Now this would be Exxon's largest deal since its mega merger back in the '90s and would also make the oil and gas company the main player in the oil-rich West Texas and New Mexico area here.
And, Brad, we know that the Permian Basin has long been a priority here for ExxonMobil. They've talked about the region-- how it is critical, very important here to potential growth plans going forward-- now this deal from Exxon if, in fact, it does go through, it makes sense given the timing, right?
Exxon, many of the larger oil Giants coming off a record year for profits. They have a lot of excess money. They're looking to put it to work. And many analysts out there are saying that there's not a heck a lot of options beyond going out there and acquiring some of the smaller players within the space.
BRAD SMITH: Yeah, absolutely. I mean, consolidation is one of the things that we were continuing to keep in focus, especially, if there were some buying opportunities that the major behemoths, Chevron, Exxon-- we're going to perhaps kick the tires on or at least kick the drills on here and figure out if they could-- I'm sorry, I know that was corny. But, see if they could potentially acquire more market share either through regionality or just through operations as well.
It's interesting, Pioneer looks like it has a market capitalization of roughly $50 billion coming into these deal talks here. It's a larger question of, OK, where in these consolidation efforts would this deal and how quickly accretive would it be not just to Exxon's business but what type of synergies would they be eventually able to sell and market to the street here as the company that typically is making the announcement of an acquisition-- even though these are just talks right now-- you typically see them moving lower. That's exactly what's taking place with Exxon shares. This morning XME is down by about 2%.