Pioneer Natural Resources considers buying smaller shale rival in Marcellus basin

Ed Hammond and Dinesh Nair, Bloomberg February 25, 2023

(Bloomberg) – Pioneer Natural Resources Co. is considering an acquisition of Range Resources Corp., according to people familiar with the matter.

The Texas-based oil and gas explorer is weighing a deal for the smaller U.S. rival as it seeks further consolidation in the shale industry, the people said, asking not to be identified discussing confidential information.

Deliberations are ongoing and there’s no certainty the companies will reach an agreement, the people said. A representative for Pioneer declined to comment while Range couldn’t immediately be reached for comment.

Pioneer shares fell as much as 7% on the news while Range rose as much as 18%, giving the company a market value of $6.8 billion.

Up until Friday, shares in Pioneer have fallen 11% in New York over the last 12 months, valuing it at about $47 billion. Range’s stock is up 12% over the period.

Buying Range would bring Pioneer into the Marcellus Basin in southwest Appalachia, where the key resource is gas, not oil. Pioneer already produces gas in the Permian, but only as a byproduct from its oil wells.

Pioneer’s CEO Scott Sheffield has a reputation for dealmaking, with acquisitions of Parsley Energy and DoublePoint Energy since 2020. Both deals expanded Pioneer’s acreage in its core Midland Basin asset.

The U.S. shale sector is poised for a big return to dealmaking this year as some of the largest oil companies look for ways to deploy cash, according to a McKinsey & Co. report Friday.

Shares of other Appalachian-focused gas producers also climbed. EQT Corp. rose as much as 5.6% while Coterra Energy Inc. gained 2.8% and Antero Resources Corp. advanced 8.5%.

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