Shares of Pioneer Natural Resources Co. powered up 6.4% toward an eight-week high, to pace the S&P 500's premarket gainers, after the Wall Street Journal reported that the fracking company has held preliminary talks with Exxon Mobil Corp. over a possible acquisition. Exxon's stock fell 0.9% while futures for the S&P 500 shed 0.5%. ahead of Monday's open. Citing people familiar with the matter, the WSJ report published Friday said the discussions have been informal, but with Exxon flush with cash after recording record profits in 2022, the oil giant has been exploring options. Pioneer Natural's stock has lost 8.9% year to date through Thursday, while Exxon shares have tacked on 4.3% and the S&P 500 has gained 6.9%.

Eoin Treacy's view

The pace of M&A activity is heating up in the resources sector. Exxon Mobil’s proposed merger with Pioneer suggests the shale oil and gas sector is maturing. The days of the wildcat land grab are over. The resources are well understood and the unique attributes of unconventional supply allow production to be dialled up and down as needed. That is an attractive add on for a global major.