Pioneer shares jump on Exxon mega-merger talks

investing.com:

By Mrinalika Roy and Sabrina Valle

(Reuters) -Shares of Pioneer Natural Resources (NYSE:PXD) climbed nearly 8% on Friday on news that Exxon Mobil (NYSE:XOM), 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.

A deal would be Exxon's biggest acquisition since its $81 billion acquisition of Mobil in 1998. It would make the company one of the leading producers in the lucrative Permian basin, the largest U.S. shale oil field as the country's oil production closes in on an all-time record of 13 million barrels a day.

Pioneer's shares were trading at $235.25 on Friday, valuing the company at nearly $55 billion. The offer implies a roughly 9% premium to Pioneer's Thursday close.

Friday's gains leave the stock short of the deal value, as it is possible that the two companies will not reach an agreement.

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.

«It is a significant win for Exxon… an attractive price to acquire a unique Permian portfolio.»

Pioneer holds an estimated 6,300 net locations of high-quality inventory, according to Enverus.

The deal value implies Exxon is paying about $4.5 million for Pioneer's high-quality locations and $3.7 million for all locations, above the recent M&A trends that have valued assets around $3 million per location, Enverus said.

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.

However, any deal could attract political and