(Bloomberg) — Pioneer Natural Resources Co., one of the largest independent U.S. oil producers, is considering an acquisition of Appalachian natural gas producer Range Resources Corp., according to people familiar with the matter.
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Texas-based Pioneer is weighing a deal for its smaller US rival as it seeks further consolidation in the shale industry, the people said, asking not to be named due to confidential information.
Deliberations 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 representative for Range could not be reached for comment.
The range rose as much as 18% on Friday before closing 12% higher at $28.26, 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.
Strategic Change
The Range purchase would mark a major strategic shift for Pioneer by bringing it into the Marcellus shale basin in southwestern Appalachia, where the key resource is gas, not oil. Pioneer already produces gas in the Permian Basin in West Texas, but only as a byproduct of its oil wells.
Pioneer CEO 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 main Midland Basin asset.
The US shale sector is poised for a big return to trading this year as some of the biggest oil companies look for ways to deploy cash, according to a report from McKinsey & Co. on Friday.
share profit
Shares of other Appalachian-focused gas producers also rose on Friday. EQT Corp. rose 6.9%, while Coterra Energy Inc. gained 3.6% and Antero Resources Corp. added 8.1%.
US natural gas futures had soared even before Russia’s invasion of Ukraine a year ago, amid uncertainty over global supplies. But in the past two months they have plunged by more than half during an unusually mild US winter, meaning weaker-than-expected fuel demand.
–With assistance from Kevin Crowley and Mitchell Ferman.
(Updates with Pioneer statement in fourth paragraph)
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