(Bloomberg) — Pioneer Natural Resources Co., one of the largest independent oil producers in the U.S., is considering an acquisition of Range Resources Corp., an Appalachian natural gas producer, according to people familiar with the matter.
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Texas-based Pioneer is considering a deal for its smaller US rival as it seeks further consolidation in the shale industry, the people said, asking not to be identified when discussing confidential information.
Deliberations are ongoing and it is not certain that the companies will reach an agreement, the people said.
Pioneer said in a statement that it is “not considering a material business combination or other acquisition transaction”. A Range representative could not be reached for comment.
Range rose as much as 18% on Friday before closing 12% higher at $28.26 for the biggest one-day jump since May, pushing the company’s market value to $6.8 billion. Pioneer shares fell 4.1% to $196.57 in New York trading, giving the company a market value of $46 billion.
Buying Range would represent a major strategic shift for Pioneer by moving it to the Marcellus Shale Basin in southwestern Appalachia, where the main resource is gas, not oil. Pioneer already produces gas in the Permian Basin in West Texas, but only as a by-product of its oil wells.
Pioneer’s Chief Executive Officer Scott Sheffield has a reputation for making deals, with acquisitions of Parsley Energy and DoublePoint Energy since 2020. Both deals expanded Pioneer’s acreage at its core Midland Basin property.
According to a report from McKinsey & Co. on Friday, the US shale sector is poised for a major return to dealmaking as some of the largest oil companies look for ways to deploy cash.
Shares of other Appalachian-focused gas producers also rose Friday. EQT Corp. rose 6.9%, while Coterra Energy Inc. 3.6% won and Antero Resources Corp. 8.1% progressed.
US natural gas futures had already peaked before Russia’s invasion of Ukraine a year ago amid uncertainty over global supplies. But in the past two months, they’ve fallen by more than half during an unusually mild US winter, leading to weaker-than-expected demand for the fuel.
–With help from Kevin Crowley and Mitchell Ferman.
(Updates with Pioneer statement in fourth paragraph)
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