April 10 Reuters Pioneer Natural Resources Co39;s shares rose as much as 8.5 on Monday following a report that Exxon Mobil Corp held preliminary talks with the U.S. shale oil producer about a possible acquisition.

Shares of Pioneer were up 6.5 at 221.74, while Exxon Mobil inched up 0.2 to 115.25.

The Wall Street Journal had reported the news on Friday, citing people familiar with the matter.

Pioneer is the thirdlargest oil producer after Chevron Corp and ConocoPhillips in the Permian basin, the biggest in the United States. It currently has a market capitalization of around 49 billion, according to Refinitiv data.

Analysts believe Pioneer and other exploration and production companies could be acquired in the coming quarters given oil giants such as Exxon are looking to boost inventory.

Would not be surprised to see Exxon step up for PXD39;s scale and inventory depth in the Midland Basin, but the price tag will ultimately be based on the oil prices underwritten by Exxon. In the current environment, we think 250bbl, or a 20 premium, said Gabriele Sorbara, managing director of Equity Research at Siebert Williams Shank Co.

Exxon is coming off a year of record profits on skyhigh oil and gas prices that helped it end 2022 with 29.6 billion in cash and equivalents.

A substantial premium would be required as Pioneer has time on their side, citing a multidecade drilling inventory in the Midland basin that bests almost all independents, said TD Cowen analyst Jason…