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(Reuters) – Exxon Mobil is in advanced talks to acquire Pioneer Natural Resources in a deal that could value the shale oil and gas producer at around $60 billion (56.93 billion euros), sources close to the matter said Thursday.

This would be Exxon’s largest acquisition since its $81 billion purchase of Mobil in 1998. The transaction would allow the energy company to expand its presence in the Permian Basin, in the southern United States, one of the most profitable regions of the American oil basin.

Pioneer, whose stock market value stood at $50 billion on Thursday, is the third-largest oil producer in the Permian Basin behind Chevron and ConocoPhillips.

This basin, which extends between Texas and New Mexico, is coveted by the American energy industry because of the relatively low cost of extracting its oil and gas. In the second quarter, Exxon reached record production in the Permian Basin with 620,000 barrels of oil. However, this is less than Pioneer’s 711,000 barrels in the same region and over the same period.

If the negotiations are successful, a deal between Exxon and Pioneer could be reached in the coming days, the three sources said.

Spokespeople for Exxon and Pioneer declined to comment.

Exxon is the largest American oil group and produces an average of 3.8 million barrels of oil equivalent per day globally.

The acquisition of Pioneer would allow Exxon to have more established oil lands to increase its production when needed, rather than risking its cash flow in the development of an unknown land, a move “completely logical”, Judge Bill Smead, chief investment officer of Smead Capital Management.

(Reporting David French, Anirban Sen and Sabrina Valle; Victor Goury-Laffont, editing by Kate Entringer)

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