Dive Brief:

• Oil giant ExxonMobil is in informal talks with fracking company Pioneer Natural Resources Co. about a potential “blockbuster” acquisition, according to a Monday report from the Wall Street Journal. 
• ExxonMobil has been exploring the M&A market since posting record profits in 2022 and is “on the hunt for a seismic deal,” having discussed a potential tie-up with at least one other company, according to the report.
• With Pioneer Natural Resources trading at a market capitalization of over $50 billion, a potential acquisition would rank among the largest M&A deals of the last year, as well as Exxon’s biggest move since its merger with Mobil Corp. in 1999. 

Dive Insight:

The proposed tie up would not include any convenience stores but would further cement ExxonMobil’s place as one of the biggest oil and gas companies in the world, adding about 350 million barrels of oil per day to ExxonMobil’s upstream output. If the companies do come to terms, a resolution is not expected until later this year or early in 2024, according to the report.

Irving, Texas-based ExxonMobil saw over $62 billion in free cash flow last year, about $24 billion more than it had in 2021. That helped it end 2022 with almost $30 billion in cash, which gives the company a lot of dry powder for any potential acquisitions.

The company continues to actively acquire and process oil, having completed the expansion of its Beaumont Refinery in March. ExxonMobil provides gas to more than 10,000 fueling stations in the U.S.

ExxonMobil is not alone in seeking to leverage its cash to expand. BP, in addition to agreeing to a $1.3 billion acquisition of TravelCenters of America in recent months, also laid out over $4 billion for Archaea Energy, a company that makes biogas, a type of natural gas made from waste.