BY Fraser Tennant
In a move that will create a premier Permian independent operator, oil and natural gas company Diamondback Energy, Inc. is to acquire exploration and production firm Endeavor Energy Resources, LP in a transaction valued at approximately $26bn.
Under the terms of the definitive merger agreement, Diamondback’s existing stockholders are expected to own approximately 60.5 percent of the combined company and Endeavor’s equity holders are expected to own approximately 39.5 percent.
The combined company would be the third-largest oil and gas producer in the Permian Basin of West Texas and New Mexico, behind Exxon Mobil and Chevron. The transaction has been unanimously approved by the board of directors of Diamondback and received the necessary Endeavor approvals.
“This is a combination of two strong, established companies merging to create a ‘must own’ North American independent oil company,” said Travis Stice, chairman and chief executive of Diamondback. “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.”
Upon closing, Diamondback’s board will expand to 13 members and the combined company will continue to be headquartered in Midland, Texas.
“As we look toward the future, we are confident joining with Diamondback is a transformational opportunity for us,” said Lance Robertson, president and chief executive of Endeavor. “Our success up to this point is attributable to the dedication and hard work of Endeavor employees, and today’s announcement is recognition by Diamondback of the significant efforts from our team over the past seven years, driving production growth, improving safety performance and building a more sustainable company.”
The merger is expected to close in the fourth quarter of 2024, subject to the satisfaction of customary closing conditions, including termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and approval of the transaction by Diamondback’s stockholders.
Mr Robertson concluded: “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.”
News: Diamondback sets $26 billion deal for shale oil rival Endeavor Energy