Exxon Mobil Corp. has reportedly begun early conversations with Pioneer Natural Resources Co. about a potential takeover of the West-Texas based driller that owns numerous oil reserves in a key US shale region, according to the Wall Street Journal.

The talks between the two companies for a potential deal have been informal, the Journal reported citing unnamed sources.

Exxon, which reported a record $55.7 billion in profits in 2022, is sitting on a heap of cash and, according to those familiar with the company’s plans, has been looking for a mega deal.

People with knowledge of the situation told the publication that Exxon executives have explored a prospective alliance with at least one other corporation.

Any transaction, if it materializes, is unlikely to happen until later this year or next year, the sources said, adding that, talks may not go to formal negotiations at all, or Exxon may pursue a different company.

The deal would bring together the top Western oil business, which is worth more than $468 billion, with a driller who owns substantial oil reserves in America’s most sought-after fracking hotspot – the oil-rich West Texas Permian Basin and New Mexico.

If Exxon buys Pioneer, which has a market cap of about $49 billion, it would probably be Exxon’s largest deal since its mega-merger with Mobil in 1999.

It is likely that an acquisition of Pioneer would put the company ahead of the most recent blockbuster in the US oil industry, Occidental Petroleum Corp., which purchased Anadarko Petroleum Corp. for approximately $38 billion in 2019, and Exxon’s 2010 acquisition of XTO Energy Inc. for about $30 billion.

Last year’s skyrocketing commodity prices led to record profits for major producers like Exxon, fueling speculation about increased deal activity as companies compete for limited growth in the US shale industry.