(Bloomberg) – Pioneer Natural Resources Co., one of the largest independent US oil producers, is considering an acquisition of natural gas producer Range Resources Corp, according to people familiar with the matter. from the Appalachians.
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Texas-based Pioneer is considering a deal for its smaller US competitor as it seeks further consolidation in the shale industry, the people said, asking not to be identified when it comes to sensitive information.
Consultations are ongoing and there is no certainty the companies will reach an agreement, the people said.
Pioneer said in a statement that it “is not contemplating a significant business combination or other acquisition transaction.” A Range representative could not be reached for comment.
The range rose as much as 18% on Friday before closing 12% higher at $28.26, marking the largest one-day jump since May and taking the company’s market value to $6.8 billion. Pioneer’s shares fell 4.1% in New York trading to $196.57, giving the company a market value of $46 billion.
Strategic change
Buying Range would represent an important strategic shift for Pioneer by placing it in the Marcellus Shale Basin in southwestern Appalachia where the key resource is gas and not oil. Pioneer already produces gas in the Permian Basin of West Texas, but only as a by-product from its oil wells.
Pioneer Chief Executive Officer Scott Sheffield is known for making deals, with acquisitions of Parsley Energy and DoublePoint Energy since 2020. Both deals expanded Pioneer’s acreage in its core Midland Basin area.
According to a report by McKinsey & Co. on Friday, the US shale sector is poised for a big return to dealmaking this year as some of the biggest oil companies look for ways to stake cash.
The story goes on
share profits
Shares of other Appalachian-centric gas producers also rose on Friday. EQT Corp. rose 6.9%, while Coterra Energy Inc. rose 3.6% and Antero Resources Corp. up 8.1%.
US natural gas futures were already surging before Russia invaded Ukraine a year ago on uncertainty about global supplies. But in the past two months, they’ve fallen by more than half during an unusually mild US winter, prompting weaker-than-expected demand for the fuel.
–Assisted by Kevin Crowley and Mitchell Ferman.
(Updates with Pioneer statement in fourth paragraph)
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