By Kevin Crowley and Kiel Porter

(Bloomberg) Malaysia’s state-backed oil company Petroliam Nasional Bhd. has had preliminary talks about buying Permian Basin shale driller DoublePoint Energy LLC, according to people familiar with the matter.Talks are in the early stages so there’s no guarantee a transaction will occur, said the people, who declined to be named because the negotiations are private. If a deal does goes ahead it could be worth several billion dollars, they said.

A Petronas spokesman contacted on Wednesday wasn’t immediately able to comment. Cody Campbell, co-CEO of DoublePoint, declined to comment on any bidders and said the company hasn’t retained bankers to advise on any potential sale.

“We are beginning to see signs of life in the A&D market,” Campbell said, using the industry acronym for acquisitions and divestitures. “We’re optimistic about the direction in which it’s headed.”

Chevron Corp.’s $5 billion deal to buy Noble Energy Inc. earlier this year raised hopes of a pickup in dealmaking in the U.S. energy patch, which is reeling from a steep crash in oil prices caused by the Covid-19 pandemic. Noble and its advisers talked with 10 other companies before agreeing to be bought by Chevron, underscoring the desire of many operators to consolidate.

But as the Chevron deal showed, buyers are unwilling to pay high premiums for shale producers because of low oil prices, a decade-long history of poor industry returns and a plethora of potential sellers to choose from.

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DoublePoint co-chief executive officers Campbell and John Sellers last month hosted President Donald Trump at a rig in West Texas. The pair, both 38, became well known in the Permian for patching together drilling leases and selling them to larger operators, including a $2.8 billion sale to Parsley Energy Inc. in 2017.

DoublePoint pumps about 55,000 barrels of oil a day but its key asset is a 100,000-acre swath of drilling rights in the heart of the Permian. The company is heavily hedged through the end of 2021, reducing exposure to oil-price volatility as it ramps up output, Campbell said in April.

The explorer also has undrawn equity commitments from private equity backers that include Apollo Global Management Inc., Quantum Energy Partners, Magnetar Capital and Blackstone Group Inc.’s GSO Capital Partners.

An Apollo spokesperson declined to comment for this story. Blackstone, Magnetar and Quantum didn’t immediately respond to requests for comment.