Carrizo Oil & Gas Inc. (NASDAQ: CRZO) is reportedly considering a merger with rival U.S. shale producer SM Energy Co. (NYSE: SM), according to a recent report by Bloomberg.

“Carrizo has held early-stage discussions with SM about a potential combination,” Bloomberg reported citing people familiar with the matter.

Carrizo Oil & Gas is a Houston-based energy company founded in 1993. The company currently operates in the Eagle Ford Shale in South Texas and in the Delaware Basin within the prolific Permian in West Texas.

Similarly, SM Energy’s two core operations include positions in the Eagle Ford Shale as well as the Permian’s Midland sub-basin. The Denver-based operator has roots stretching back more than a century to its inception in 1908.

SM Energy’s Eagle Ford acreage in South Texas is primarily located in Dimmit and Webb counties. Meanwhile, Carrizo’s position in the shale play stretches across Atascosa, Frio, Dimmit, La Salle, McMullen and Zavala counties, Texas.

As for the Permian Basin, SM Energy’s assets are located in Howard, Martin, Midland and Upton counties, Texas, while Carrizo’s acreage is mostly in Culberson, Reeves and Ward counties, Texas.