Pioneer’s $6.4 Billion Deal for Smaller Shale Rival Signals Life in Oil Patch

Pioneer’s $6.4 Billion Deal for Smaller Shale Rival Signals Life in Oil Patch

Pioneer Natural Resources Co. 's $6.4 billion deal to buy DoublePoint Energy this week is the latest sign of renewed interest in smaller shale drillers as oil prices recover from last year's pandemic lows.

The deal, announced Thursday evening, was the largest acquisition of a privately held shale company since 2011. It follows the sale of a number of smaller oil-and-gas companies and demonstrates momentum in what had been a moribund market, according to executives, investors and data from consulting firm Enverus.

The market for private oil-production firms had collapsed in recent years as investors, frustrated following years of dismal returns, pushed larger shale companies to curtail investments and stop buying smaller debt-laden companies.

That has changed in recent months—at least for the private companies with better assets and lower debt—as U.S. benchmark prices hover above $60 a barrel. A surge in the shares of U.S. oil producers, following the rollout of Covid-19 vaccines and a slow but steady recovery in oil demand, is enabling larger