By Anirban Sen
(Reuters) – U.S. shale oil rivals Diamondback Energy and Endeavor Energy Resources are close to finalizing a cash and stock deal worth about $25 billion that would create an oil and gas company worth more than $50 billion, sources said on Sunday. Said.
Diamondback could announce a transaction as soon as Monday that would give its shareholders more than half of the combined companies’ profits, the people said.
Reuters reported in December that Endeavor Energy Partners was exploring a sale that could value the largest privately held oil and gas producer in the Permian Basin at between $25 billion and $30 billion.
Endeavor and Diamondback did not immediately respond to requests for comment.
The combined company will be the third-largest oil and gas producer in the Permian Basin of West Texas and New Mexico, behind Exxon Mobil and Chevron, which have also recently announced deals.
“It’s a layoff in terms of acreage overlap and fit,” said Dan Pickering, chief investment officer at Pickering Energy Partners. The combined company will replace Pioneer Natural Resources, which is being acquired by Exxon, as the largest pure-play Permian producer, he said.
The biggest Permian producers are uniting in a race to lock up future drilling inventory and output from the largest U.S. oil field. The deal is likely to put additional pressure on the remaining companies to combine for greater efficiency and scale, analysts said.
The Wall Street Journal previously reported that Diamondback had fended off competition from other parties, including ConocoPhillips.
The sale will come nearly 45 years after Texas oilman Autry Stephens started the company that would become Endeavour.
Endeavor’s operations span 350,000 net acres (1,416 square kilometers) in the Midland portion of the Permian Shale Basin…