The past week has been hell for energy investors. Exxon Mobil (XOM) just gave them a reason to laugh.

With crude prices down about $10 a barrel in 10 days, The Wall Street Journal reported late Thursday that the oil giant was on the verge of completing the biggest deal of the century, It may buy shale oil producer Pioneer Natural Resources for $60 billion. Exxon has bought other companies over the years, but only two deals come close to the size of Pioneer's purchase: its $75 billion merger with Mobil in 1999 and its $31 billion all-stock purchase of natural gas driller XTO Energy in 2010.

The Mobil deal, the largest acquisition at the time, was announced at a time when oil prices were trading at record lows near $11 a barrel. Within a decade, oil prices briefly topped $140, making an already good deal look even better. The XTO deal, however, was an acknowledged failure, marking the beginning of a decade-long glut of natural gas.

This time, though, Exxon doesn't need luck to do well. Eye-popping deal numbers aside, Pioneer, while big, is neither particularly risky nor transformative for Exxon's business model.

Exxon was a late entrant to shale oil and gas when it bought XTO, but the technology for extracting oil and gas from these sites was so new that little was known about the economics. Not only are natural gas prices much lower than expected, but the influx of capital into stratigraphic areas such as the Permian Basin often consumes more cash than it produces.

If there is anything to blame for the deal, it is that the big shale companies that dominate the business in the field have recently come under fire for being too conservative and leaving RIGS idle when oil prices were quite high. Pioneer, for example, had $7.32 billion in free cash flow last year.

Exxon's financial strength is also different from when it did the XTO and Mobil deals. The company's free cash flow in 2022 is 10 times higher than in 2009 and 20 times higher than in 1998.

The Pioneer deal does not have the same industrial logic as the Mobil merger. According to management estimates in the summer of 2000, that merger cut about 19,000 jobs and resulted in $4.6 billion in pretax cost savings. The efficiency gains with Pioneer are modest, but the deal will allow Exxon to add valuable acreage near some of its own fields, making it a major producer in the Permian Basin. Pioneer acquired two smaller regional drillers in 2021 for a total of $11 billion. Few other shale oil producers are big enough to tempt Exxon.

And the price is right. Compared with independent oil and gas companies, investors have a new understanding of integrated supergiants like Exxon. Factoring in net debt to the $60 billion price tag, Exxon would have to pay only about 6.5 times the earnings before interest, taxes, depreciation and amortization that analysts polled by FactSet expect Pioneer to generate over the next 12 months. Pioneer's average multiple over the past 10 years is much higher at 8.5 times.

Investors in other producers are also paying attention. Another supergiant, Chevron (CVX), once thought it had a deal to buy Permian driller Anadarko in 2019, but then, The much smaller Occidental Petroleum (OXY), with the help of Warren Buffett's Berkshire Hathaway (BRKA), pre-empted Anadarko. Berkshire currently owns more than 25% of Occidental Petroleum.

Exxon's acquisition would add scarcity value to the few remaining large targets. It was even enough to take the market's attention off oil prices for a while.