Pioneer shares jump on Exxon mega-merger talks

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Pioneer shares jump on Exxon mega-merger talks

© Reuters. FILE PHOTO: Exxon Mobil logo and stock graph are seen through a magnifier displayed in this illustration taken September 4, 2022. REUTERS/Dado Ruvic/Illustration/File Photo), the largest U.S. oil and gas company, was in advanced talks to buy the shale producer in a deal valued at a whopping $60 billion.

Pioneer's shares were trading at $235.25 on Friday, valuing the company at nearly $55 billion. The offer implies a roughly 20% premium to Pioneer's Thursday close. The premium is line with other E&P mergers this year, but"still strikes us as slightly low for a company with the unique scale and quality of inventory held by Pioneer," said Andrew Dittmar, a director at Enverus.Pioneer holds an estimated 6,300 net locations of high-quality inventory, according to Enverus.

If the negotiations conclude successfully, an agreement between Exxon and Pioneer could be reached in the coming days, Reuters reported on Thursday, citing three sources."Pioneer is the Permian's largest operator at 9% of gross production while Exxon is No. 5 at 6%. Combined amounts to 15% of operated Permian production, but only 6% of total US production.

 

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