Diamondback Energy (NASDAQ: FANG) has announced its acquisition of Endeavor Energy Partners, the Permian Basin's largest privately held producer, in a deal valued at approximately $26 billion, including debt. This transaction underscores a growing trend of consolidation within the industry aimed at bolstering production in the world's most prolific oil field.
The acquisition is part of a broader wave of mergers and acquisitions sweeping through the Permian Basin. Notably, this trend was highlighted by Exxon Mobil's colossal $60 billion purchase of Pioneer Natural Resources earlier in 2023, marking the year's largest transaction. The Diamondback-Endeavor deal propels the combined entity into the league of the top three oil and gas producers in the region, trailing only behind industry giants Exxon and Chevron.
Endeavor Energy Partners brings extensive operations across 350,000 NET acres in the Midland area of the Permian Basin, spanning both West Texas and eastern New Mexico, to the table. This strategic acquisition is expected to significantly bolster Diamondback's production capabilities and efficiency.
Financially, Endeavor is poised for growth, with Fitch Ratings predicting the company will generate around $1 billion in free cash flow in 2024. This deal, therefore, is not just a testament to Diamondback's ambitious expansion strategy but also a vote of confidence in the enduring value and potential of the Permian Basin's resources.