Diamondback Energy buys Permian assets for $1.6 bln

Diamondback Energy has signed a purchase agreement to acquire all shares of Permian Basin player FireBird Energy for USD 1.6 billion, the buyer announced on Tuesday.

The buyer has committed 5.86 million of its shares and USD 775 million in cash to make the purchase.

FireBird Energy currently holds around 275 square kilometres of assets on the Midland Basin in Texas, with estimated production of 17 million bopd at the time of closing. Production from the acquired assets is expected to rise to 19 million bopd in 2023.

The acquired company currently operates three rigs, with a reduction to one expected in 2023 under its current development plan without negatively affecting production capacity.

The acquisition is adjacent to Diamondback Energy’s current operations.

This marks Diamondback Energy’s largest acquisition since it acquired both QEP Resources and Guidon Operating for a combined USD 3.2 billion in 2020.

The deal is expected to close in Q4 2022.