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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.
The deal comes amid a wave of consolidation in the prolific
Permian Basin to boost production - the biggest in 2023 was
Exxon buying Pioneer Natural Resources in an about $60 billion
deal.
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.
The deal would see the combined company pumping 816,000 barrels
of oil equivalent per day (boepd) and annual synergies of $550
million, coming up to more than $3 billion in net value over the
next decade.
Reuters had on Sunday reported about merger talks between
Diamondback and Endeavor, citing sources.
The deal to buy Endeavour consists of about 117.3 million shares
of Diamondback common stock and $8 billion in cash. The sale
comes almost 45 years after Texas oilman Autry Stephens started
the company that would become Endeavor.
Stephens, a former appraisals engineer who became more known
through his appearances on the TV documentary series Black Gold,
grew Endeavor by acquiring the unloved acreage of his
competitors and managing to extract oil and gas profitably.
Endeavour'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.
(Reporting by Seher Dareen and Arunima Kumar in Bengaluru;
Editing by Arun Koyyur)
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