Shale producer Diamondback Energy said on Monday it would buy the largest privately held oil and gas producer in the Permian Basin, Endeavor Energy Partners, in a cash-and-stock deal valued at about $26 billion, including debt. The combined company would be the third-largest oil and gas producer in the region behind Exxon and Chevron, with both having announced recent deals.
Oil and gas producers are taking advantage of their high stock prices to secure lower-cost reserves and prepare for the next upheaval in an industry that is likely to witness more deals. "Diamondback has proven itself to be a premier low-cost operator in the Permian Basin over the last 12 years, and this combination allows us to bring this cost structure to a larger asset and allocate capital to a stronger pro forma inventory position," CEO Travis Stice said in a statement.
Endeavor's operations span about 350,000 net acres in the Midland portion of the Permian and it expects to produce some 350,000 to 365,000 barrels of oil equivalent per day in 2024. Diamondback expects the deal to close in the fourth quarter and its stockholders are expected to own 60.5% of the combined entity, while Endeavor will own the rest.
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