Exxon Mobil ($XOM (+2,77%) ) plans to acquire Pioneer Natural Resources ($PXD ) for approximately 58 billion U.S. dollars. Exxon is expected to pay more than $250 per share for the Texas-based acquisition target.

The final agreement has not yet been reached, and the terms could change, according to Bloomberg. Representatives from Exxon and Pioneer have not yet commented on the matter.

A sale price of $250 per share would represent a premium of 16% over Pioneer’s closing price on Thursday, before reports of the talks between the two companies surfaced. This would value Pioneer at at least $58 billion .

This transaction would be the largest acquisition of 2023 and, at the same time, the largest acquisition by Exxon since its merger with Mobil Corp. in 1999.

The acquisition of Exxon and Pioneer would bring together two of the largest landowners in the Permian Basin in Texas and New Mexico , which would make Exxon the dominant oil producer in this region. PPermian Basin is one of the “most productive” oil fields in the U.S. and has a wide range of undeveloped sites that Exxon can quickly bring online to keep pace with global demand.

Since the future of medium-term oil demand is uncertain due to the transition to renewable energy, the flexibility of shale oil is attractive to companies like Exxon.

A potential sale of Pioneer could also spark interest from other companies with strong balance sheets in the shale sector , such as Chevron ($CVX (+2,97%) ) or Occidental Petroleum ($OXY (+2,88%) )

This move by Exxon is the result of years of efforts to make significant acquisitions in the Permian Basin that previously failed to materialize due to unfavorable conditions.

Particular attention is focused on Pioneer’s future, as the founder and CEO
Scott Sheffield announced in April that he will retire at the end of the year. Sheffield has been with the company since the 1970s and is considered the architect of the shale oil boomthat has turned the U.S. into an oil and natural gas giant.