Pioneer Natural Resources Co PXD is in talks with Parsley Energy Inc PE for an acquisition deal, according to the Wall Street Journal.
If the deal goes through, Pioneer could become one of the largest oil producers in the Permian Basin.
What Happened: Reportedly, both the Texas-based oil producers could enter into an all-stock deal by the end of the month. However, no official statements have been released yet.
A successful acquisition would give Pioneer access to additional sites in the Permian Basin.
Despite being market rivals, both companies have strong connections. Pioneer's CEO Scott Sheffield is the father of Parsley's co-founder and chairman Bryan Sheffield -- WSJ.
Parsley's current CEO, Matt Gallagher, is a former Pioneer employee, who joined the company in 2010.
Why Does It Matter: Oil producers have suffered significant market volatility since the pandemic, which has led to a wave of consolidation in the industry.
After a plunge in oil demand, there has been significant consolidation in the oil-rich shale patch as producers try to stay afloat.
On Monday, ConocoPhilips COP announced the acquisition of Concho Resources Inc CXO in a $9.7 billion all-stock deal.
In late September, Devon Energy Corp DVN and WPX Energy Inc WPX merged to create a new entity with an estimated $12 billion market value.
Chevron Corporation CVX acquired Noble Energy Inc in a $5 billion all-stock deal in July.
PXD, PE Price Action: PXD shares fell 3.56% to close at $87.05 on Monday, while PE shares traded 1.05% higher to $10.19 in the after-hours session.
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