Pioneer Natural Resources stock surged early Monday on reports Exxon Mobil has held early takeover talks with the shale play. PXD shares had a $49 billion market cap as of Thursday, but the stock took off early Monday as Exxon Mobil stock edged down slightly.
Exxon Mobil has held preliminary talks with Pioneer Natural Resources about a possible acquisition of the U.S. shale oil producer, the Wall Street Journal reported on Friday, citing sources.
The Wall Street Journal reports that the talks between the two companies have been informal. However, Exxon Mobil, coming off record profits in 2022, is looking for options to spend some of its cash, according to the WSJ.
It is still unclear if a deal will get done and it would likely take until later this year or get pushed to 2023, the Journal reported.
Pioneer Natural Resources, the largest oil producer in the Permian Basin, saw profits surge 130% to $30.57 per share in 2022. The company generated $8.4 billion in surplus cash last year. The company returned around $8 billion to shareholders in dividends and share repurchases. Pioneer Natural Resources produced 650,000 barrels of oil equivalent per day in 2022.
The company also ended 2022 with its debt down more than 26% compared to the end of 2021, according to FactSet.
Analysts project 2023 earnings dropping 27% to $22.18 per share with revenue retreating 13% to $21.15 billion.
Pioneer Natural Resources stock jumped 5.8% Monday to 220.33 during market trade. Shares on Thursday closed down 1% to 208.16. Exxon Mobil stock fell 0.4% Monday.
Pioneer Natural Resources Stock: Shale Stocks React
Along with Pioneer Natural Resources stock, other shale plays advanced Monday morning.
Diamondback Energy rose around 1.9% while Devon Energy edged up 0.9% and EOG Resources climbed 0.8%.
Marathon Oil and SM Energy edged up 0.9% while APA jumped 2.7%. Warren Buffett-backed Occidental Petroleum advanced 1.7% in market trade.
U.S. oil futures declined more 1% to just below $80 per barrel Monday. Last week, OPEC+, which includes the Organization of the Petroleum Exporting Countries and key allies such as Russia, announced an unexpected crude oil production cut of about 1.15 million barrels a day starting in May.
Saudi Arabia will trim production by 500,000 barrels per day. Kuwait, the United Arab Emirates, Iraq, Algeria and Kuwait are among members that will also cut. Russia said its already-planned March-June cut will now last through 2023.
The surprise OPEC+ cut came as the oil cartel previously signaled it would hold supply steady throughout 2023. In October, OPEC+ cut output by 2 million barrels per day.
U.S. crude oil prices leapt 6.65% to $80.92 a barrel last week, mostly on April 3 following the OPEC+ news. In mid-March, West Texas Intermediate (WTI) sank to 15-month lows, around $67.61 per barrel, amid concern over the SVB Financial crash. Energy stocks also mostly skidded along with oil prices.
Pioneer Natural Resources stock is 11th in IBD's Oil & Gas-U.S. Exploration and Production industry group. PXD has an 64 Composite Rating out of 99. Pioneer Natural Resources stock has an 27 Relative Strength Rating. The EPS Rating is 97 out of 99.
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