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In a landmark development, the largest U.S. oil producer Exxon Mobil Corp. (XOM - Free Report) is in talks to acquire Pioneer Natural Resources (PXD - Free Report) , a Texas-based hydrocarbon explorer and producer.
The acquisition, if successful, could be valued at approximately $60 billion, marking Exxon’s biggest acquisition since its merger with Mobil Corp. in 1999. At this size, the deal would also be the world’s biggest this year, surpassing pharmaceutical giant Pfizer Inc.’s $43 billion acquisition of cancer-drug maker Seagen Inc. announced in March (see: all the Energy ETFs here).
The takeover could potentially deliver a win-win scenario, enhancing Exxon Mobil's production capabilities while providing Pioneer with the backing of a well-established industry giant. Investors seeking to tap the opportunity arising from the projected deal could bet on ETFs like iShares U.S. Oil & Gas Exploration & Production ETF (IEO - Free Report) , Strive U.S. Energy ETF (DRLL - Free Report) , Energy Select Sector SPDR (XLE - Free Report) , iShares U.S. Energy ETF (IYE - Free Report) and Fidelity MSCI Energy Index ETF (FENY - Free Report) .
Deal in Focus
If it materializes, the deal will reshape the competitive landscape of the U.S. oil sector, uniting two of the biggest acreage holders in the Permian Basin of Texas and New Mexico. It will make Exxon the oil field’s biggest producer, with an output of about 1.2 million barrels a day — more than many OPEC nations. It would also extend Exxon’s inventory of top-tier drilling locations in the basin by decades, providing low-cost, low-risk crude well beyond 2050 to feed its giant refinery network on the Gulf Coast.
Notably, Pioneer is the third-largest oil producer in the Permian basin after Chevron Corp (CVX - Free Report) and ConocoPhillips (COP - Free Report) .
The deal is expected to be sealed in the coming days but may attract political and regulatory scrutiny, especially in a climate where the White House had earlier accused Exxon of amassing excessive profits at the consumers' expense.
The potential Exxon-Pioneer deal underscores a broader industry trend where oil majors are turning to acquisitions rather than drilling new acreage, to mitigate risks and secure more established oil-producing lands. For instance, Chevron recently agreed to acquire shale producer PDC Energy Inc. in a transaction valued at $7.6 billion.i
ETFs in Focus
Let’s delve into each ETF below:
iShares U.S. Oil & Gas Exploration & Production ETF (IEO - Free Report)
iShares U.S. Oil & Gas Exploration & Production ETF provides exposure to U.S. companies engaged in the exploration, production and distribution of oil and gas. It tracks the Dow Jones U.S. Select Oil Exploration & Production Index and holds 46 stocks in its basket with Pioneer Natural taking the fourth spot at 7.21% share.
iShares U.S. Oil & Gas Exploration & Production ETF has AUM of $888.6 million and trades in an average daily volume of 168,000 shares. The fund charges 40 bps in fees per year and has a Zacks ETF Rank #3 (Hold).
Energy Select Sector SPDR is the largest and the most popular ETF in the energy space, with AUM of $38.2 billion and an average daily volume of 19 million shares per day. It offers exposure to the broad energy space and follows the Energy Select Sector Index. Energy Select Sector SPDR holds 23 securities in its basket, with Exxon Mobil occupying the top spot with 23.5% share (read: Oil to Touch $100 Soon? Sector ETFs to Benefit/Lose).
Energy Select Sector SPDR charges 10 bps in annual fees and has a Zacks ETF Rank #3.
Strive U.S. Energy ETF seeks broad market exposure to the U.S. energy sector and follows the Solactive United States Energy Regulated Capped Index. It holds 62 stocks in its basket, with Exxon Mobil taking the top position at 22%.
Strive U.S. Energy ETF has gathered $357.1 million in its asset base. It charges 41 bps in fees per year from investors and trades in an average daily volume of 34,000 shares.
iShares U.S. Energy ETF tracks the Russell 1000 Energy RIC 22.5/45 Capped Gross Index (USD), giving investors exposure to U.S. companies that produce and distribute oil and gas. It holds 40 stocks in its basket, with Exxon Mobil occupying the top two positions at 23.2% share (read: 4 Sectors Warren Buffett Binges On: ETFs in Focus).
iShares U.S. Energy ETF charges 40 bps in fees per year from its investors. It has AUM of $1.3 billion and an average daily volume of about 454,000 shares. The product has a Zacks ETF Rank #3.
Fidelity MSCI Energy Index ETF fund follows the MSCI USA IMI Energy Index, holding 120 stocks in its basket. XOM takes the top spot at 23.3%. Fidelity MSCI Energy Index ETF charges 8 bps in annual fees and trades in a good volume of around 528,000 shares. It has accumulated $1.6 billion in its asset base and has a Zacks ETF Rank #3 with a High risk outlook.
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ETFs in Focus on Exxon-Pioneer Deal Talks
In a landmark development, the largest U.S. oil producer Exxon Mobil Corp. (XOM - Free Report) is in talks to acquire Pioneer Natural Resources (PXD - Free Report) , a Texas-based hydrocarbon explorer and producer.
The acquisition, if successful, could be valued at approximately $60 billion, marking Exxon’s biggest acquisition since its merger with Mobil Corp. in 1999. At this size, the deal would also be the world’s biggest this year, surpassing pharmaceutical giant Pfizer Inc.’s $43 billion acquisition of cancer-drug maker Seagen Inc. announced in March (see: all the Energy ETFs here).
The takeover could potentially deliver a win-win scenario, enhancing Exxon Mobil's production capabilities while providing Pioneer with the backing of a well-established industry giant. Investors seeking to tap the opportunity arising from the projected deal could bet on ETFs like iShares U.S. Oil & Gas Exploration & Production ETF (IEO - Free Report) , Strive U.S. Energy ETF (DRLL - Free Report) , Energy Select Sector SPDR (XLE - Free Report) , iShares U.S. Energy ETF (IYE - Free Report) and Fidelity MSCI Energy Index ETF (FENY - Free Report) .
Deal in Focus
If it materializes, the deal will reshape the competitive landscape of the U.S. oil sector, uniting two of the biggest acreage holders in the Permian Basin of Texas and New Mexico. It will make Exxon the oil field’s biggest producer, with an output of about 1.2 million barrels a day — more than many OPEC nations. It would also extend Exxon’s inventory of top-tier drilling locations in the basin by decades, providing low-cost, low-risk crude well beyond 2050 to feed its giant refinery network on the Gulf Coast.
Notably, Pioneer is the third-largest oil producer in the Permian basin after Chevron Corp (CVX - Free Report) and ConocoPhillips (COP - Free Report) .
The deal is expected to be sealed in the coming days but may attract political and regulatory scrutiny, especially in a climate where the White House had earlier accused Exxon of amassing excessive profits at the consumers' expense.
The potential Exxon-Pioneer deal underscores a broader industry trend where oil majors are turning to acquisitions rather than drilling new acreage, to mitigate risks and secure more established oil-producing lands. For instance, Chevron recently agreed to acquire shale producer PDC Energy Inc. in a transaction valued at $7.6 billion.i
ETFs in Focus
Let’s delve into each ETF below:
iShares U.S. Oil & Gas Exploration & Production ETF (IEO - Free Report)
iShares U.S. Oil & Gas Exploration & Production ETF provides exposure to U.S. companies engaged in the exploration, production and distribution of oil and gas. It tracks the Dow Jones U.S. Select Oil Exploration & Production Index and holds 46 stocks in its basket with Pioneer Natural taking the fourth spot at 7.21% share.
iShares U.S. Oil & Gas Exploration & Production ETF has AUM of $888.6 million and trades in an average daily volume of 168,000 shares. The fund charges 40 bps in fees per year and has a Zacks ETF Rank #3 (Hold).
Energy Select Sector SPDR (XLE - Free Report)
Energy Select Sector SPDR is the largest and the most popular ETF in the energy space, with AUM of $38.2 billion and an average daily volume of 19 million shares per day. It offers exposure to the broad energy space and follows the Energy Select Sector Index. Energy Select Sector SPDR holds 23 securities in its basket, with Exxon Mobil occupying the top spot with 23.5% share (read: Oil to Touch $100 Soon? Sector ETFs to Benefit/Lose).
Energy Select Sector SPDR charges 10 bps in annual fees and has a Zacks ETF Rank #3.
Strive U.S. Energy ETF (DRLL - Free Report)
Strive U.S. Energy ETF seeks broad market exposure to the U.S. energy sector and follows the Solactive United States Energy Regulated Capped Index. It holds 62 stocks in its basket, with Exxon Mobil taking the top position at 22%.
Strive U.S. Energy ETF has gathered $357.1 million in its asset base. It charges 41 bps in fees per year from investors and trades in an average daily volume of 34,000 shares.
iShares U.S. Energy ETF (IYE - Free Report)
iShares U.S. Energy ETF tracks the Russell 1000 Energy RIC 22.5/45 Capped Gross Index (USD), giving investors exposure to U.S. companies that produce and distribute oil and gas. It holds 40 stocks in its basket, with Exxon Mobil occupying the top two positions at 23.2% share (read: 4 Sectors Warren Buffett Binges On: ETFs in Focus).
iShares U.S. Energy ETF charges 40 bps in fees per year from its investors. It has AUM of $1.3 billion and an average daily volume of about 454,000 shares. The product has a Zacks ETF Rank #3.
Fidelity MSCI Energy Index ETF (FENY - Free Report)
Fidelity MSCI Energy Index ETF fund follows the MSCI USA IMI Energy Index, holding 120 stocks in its basket. XOM takes the top spot at 23.3%. Fidelity MSCI Energy Index ETF charges 8 bps in annual fees and trades in a good volume of around 528,000 shares. It has accumulated $1.6 billion in its asset base and has a Zacks ETF Rank #3 with a High risk outlook.