Shares of Parsley Energy (PE) - Get Parsley Energy, Inc. Class A Report jumped Tuesday on reports that rival Pioneer Natural Resources (PXD) - Get Pioneer Natural Resources Company Report was in talks to buy the oil and gas producer as the pandemic-driven drop in energy prices continues to drive consolidation in the U.S. shale industry.
Citing people familiar with the discussions, the Financial Times reported that Pioneer and Parsley were negotiating an all-stock deal that would help them better weather the headwinds faced by producers due to low prices of crude.
A deal, which would create a significant Permian player with about $10 billion in combined revenue and production of more than 550,000 barrels of oil a day, could be reached within weeks, people close to the talks told the Financial Times.
A tie-up between the two producers would mark the fourth big deal on the U.S. oil patch since this year’s price crash sent the market into a tailspin, leaving oil and gas producers and refiners scrambling to staunch losses and cut costs.
It also follows a dismal year for oil and energy markets. Oil prices collapsed earlier this year as global lockdowns brought demand for resources to a halt and after a Saudi-Russia price war, which sent U.S. benchmark West Texas Intermediate crude tumbling below zero for the first time ever.
ConocoPhillips (COP) - Get ConocoPhillips Report on Monday reached an agreement to acquire rival Concho Resources (CXO) - Get Concho Resources Inc. Report in an all-stock deal valued at $9.7 billion including debt. The deal is expected to close in the first quarter of 2021.
Energy giant Chevron (CVX) - Get Report in July said it would buy Noble Energy (NBL) - Get Report for $5 billion in stock in what at the time marked the biggest oil-patch tie-up since the coronavirus pandemic took hold.
Shares of Parsley Energy were up 3.57% at $10.45 in trading on Tuesday, while shares of Pioneer Natural Resources were down 5.01% at $82.69.