Another Oil and Gas Merger May Be Coming Soon

Earlier this week, energy giant ConocoPhillips announced it was acquiring Permian Basin shale producer Concho Resources for $9.7 billion. Now, Pioneer Natural Resources (NYSE: PXD), another player in the Permian Basin of West Texas, is in talks to grow its Permian operation by buying Parsley Energy (NYSE: PE), according to a Wall Street Journal report today.

A deal would help Pioneer grow to keep up with the ConocoPhillips move into the area. Parsley's oil and gas operations in the Permian are specifically in the Delaware and Midlands basins, the same areas that Concho Resources operates in.

oil and gas drilling in Texas' Permian Basin at sunset

Image source: Getty Images.

According to the report, Pioneer and Parsley are in talks for an all-stock deal that could come to fruition before the end of the month. Bringing Parsley's acreage into its fold would make Pioneer one of the top oil producers in the prolific Permian Basin.

Pioneer has an enterprise value of about $16 billion, slightly more than twice that of Parsley Energy. A tie between the two companies already exists, as Parsley's founder and executive chairman, Bryan Sheffield, is the son of Pioneer's CEO, Scott Sheffield.

The deal would continue a wave of mergers in the sector. Besides the recently announced Conoco deal to buy Concho, last month Devon Energy and WPX Energy merged to create a company with a combined enterprise value of $12 billion. And earlier this year Chevron agreed to buy Noble Energy for about $5 billion, plus taking on its debt.

10 stocks we like better than Pioneer Natural Resources
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Pioneer Natural Resources wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of September 24, 2020

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More