Pioneer CEO Says He’s Sitting Out Latest Round of Shale M&A

“There’s no more reason for Pioneer to do any more M&A,” Scott Sheffield, the chief executive officer of Pioneer Natural Resources Co., said in an interview on Bloomberg TV.

The comments from the often-outspoken executive, who’s one of the most prominent figures in U.S. shale, points to the conflicting forces currently at work in the sector. Many investors in the industry have been pushing for more mergers, to reduce costs and players with a larger scale. Pioneer has been especially active over the past year, buying DoublePoint Energy LLC for $6.3 billion and Parsley Energy Inc. for $6.4 billion.

Yet Sheffield, 69, says those two deals are enough to be going on with, and pointed to the downside risks for anyone else looking to make an acquisition. He cited Callon Petroleum Co., which early on Wednesday announced a $788 million cash-and-stock acquisition of closely held Primexx Energy Partners Ltd. Callon’s stock subsequently dropped as much as 11%.

Devon Energy Corp., ConocoPhillips and Chevron Corp. are be among potential suitors for Shell’s Permian portfolio, Bloomberg News reported last week. Any buyer of those assets would, like Callon, likely see a negative impact on its stock, Sheffield said.

“The buyside wants consolidation, but they don’t want you to do it,” he said.

Separately, Devon CEO Richard Muncrief said on his company’s earnings conference call Wednesday, when asked about the Shell asset sale, that Devon would be “very disciplined” in any dealmaking.