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The merger would establish a shale-focused powerhouse producing nearly 4.5 million barrels of oil equivalent daily. However, this could potentially incite antitrust issues amidst worldwide endeavors to curtail greenhouse gases. The proposed Pioneer deal would bolster Exxon’s net-zero goal in the Permian by 2030, given the Permian Basin’s proximity to Exxon’s Gulf Coast refineries and Pioneer’s flexible, globally linked production.
ExxonMobil, the best-performing energy stock post-pandemic and outperforming Pioneer by over 40 percentage points, has a substantial $30 billion cash reserve, further propelling this potential acquisition. This decision follows Exxon’s history of pivotal strategic decisions shaping the energy sector, like Lee Raymond’s $80 billion Mobil Corp merger and Rex Tillerson’s $31 billion XTO Energy acquisition.
In reaction to the potential deal, PXD’s shares jumped 10.5% on Friday and climbed an additional 1.1% on Monday, while XOM rebounded with a 4% rise on Monday following a 1.7% drop on Friday. Wall Street analysts have given Exxon stock a Moderate Buy rating, anticipating a 13.63% upside and an average price target of $126.20 per share.
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