(Reuters) – Shale producer Diamondback Energy said on Monday it would buy Endeavor Energy Partners, the largest privately held oil and gas producer in the Permian Basin, in a cash and stock deal valued at about $26 billion, including debt. Is.
The combined company would be the third-largest oil and gas producer in the region behind Exxon and Chevron, with Chevron also having recently announced deals.
The deal comes amid a wave of consolidation in the abundant Permian Basin to boost production – the biggest deal was Exxon Mobil’s purchase of Pioneer Natural Resources in a $60 billion deal in 2023.
Many public producers have been in talks to buy out private producers to improve the longevity of inventory for decades, with the public now focusing on cash that can be returned to shareholders.
“Diamondback has proven itself to be a leading low-cost operator in the Permian Basin over the past 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. Is,” Diamondbacks CEO Travis Stice said in a statement.
The deal will see the combined company pumping the equivalent of 816,000 barrels of oil per day (boepd), and generate $550 million in annual synergies, amounting to more than $3 billion in net value over the next decade.
Diamondback expects the deal to close in the fourth quarter and its shareholders are expected to own 60.5% of the combined entity, while Endeavor shareholders are expected to own the rest.
Endeavor’s operations span approximately 350,000 net acres (1,416 square kilometers) in the Midland portion of the Permian, extending into West Texas and eastern New Mexico.
(Reporting by Arun Kumar and editing by Arun Koyyur)