Daily Newsletter

13 February 2024

Daily Newsletter

13 February 2024

Diamondback announces $26bn Endeavor acquisition

The combined company is expected to produce 816,000 barrels of oil and gas per day. 

Shivam Mishra

Diamondback Energy has signed a definitive agreement to acquire Endeavor Energy Resources in a cash and stock transaction valued at $26bn. 

This strategic move is expected to position Diamondback as a leading independent oil and gas operator focused on the Permian Basin.  

The deal, which includes Endeavor’s debt, comprises approximately 117.3 million shares of Diamondback common stock and $8bn in cash, with standard adjustments. 

Following the acquisition, Diamondback's current shareholders will own around 60.5% of the merged entity, while Endeavor's equity holders will own around 39.5%.  

Endeavor, which employs more than 1,200 individuals, is a key operator in the Midland region of the Permian shale basin, spanning East and West Texas in the US.  

The company's assets include roughly 470,000 net acres across multiple basins, with a concentrated 344,000 net acres in the Core 6 Midland Basin counties. 

These counties, including Martin, Howard, Midland, and Glasscock, are the focal point for Endeavor's horizontal drilling operations.  

The combined company is expected to produce 816,000 barrels of oil and gas per day and will boast a pro forma scale of approximately 838,000 net acres.  

Diamondback chairman and CEO Travis Stice said: “This is a combination of two strong, established companies merging to create a ‘must own’ North American independent oil company. The combined company’s inventory will have industry-leading depth and quality that will be converted into cash flow with the industry’s lowest cost structure, creating a differentiated value proposition for our stockholders.”  

Endeavor president and CEO Lance Robertson said: “As we look toward the future, we are confident joining with Diamondback is a transformational opportunity for us. We look forward to working together to scale our combined business, unlock value for all of our stakeholders and ensure our new company is positioned for long-term success as we build the premier Permian-focused company in Midland.” 

The consolidation within the Permian Basin comes as industry giants aim to enhance production and secure future drilling inventory.  

Recently, major US oil and gas corporations such as ExxonMobil, Chevron and Occidental, as well as smaller players, have announced similar multibillion-dollar agreements

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