US shale consolidation trend sees new $26-bln merger

Diamondback Energy has purchased rival US shale operator Endeavor Energy Resources for USD 26 billion, the buyer announced on Monday.

The transaction involves the sale of 117.3 million shares of Diamondback Energy and USD 8 billion in cash.

The definitive merger agreement creates a combined portfolio of around 3,390 square kilometres of acreage with net production of 816 million boepd.

The deal constitutes the creation of the third-largest producer in the Permian Basin of West Texas and New Mexico.

The larger producers at the basin include the new ExxonMobil-Pioneer venture with production of around 1.3 million boepd and Chevron with production of around 867,000 boepd.

“This combination meets all the required criteria for a successful combination: sound industrial logic with tangible synergies, improved combined capital allocation and significant near and long-term financial accretion,” said Travis Stice, chairman and CEO of Diamondback Energy.

“With this combination, Diamondback not only gets bigger, it gets better.”

The deal comes amid a large consolidation of the US oil and gas market.

In October 2023, ExxonMobil began talks to acquire Pioneer Natural Resources for around USD 60 billion.

Later in October, Chevron signed a definitive agreement with fellow energy multinational Hess Corporation to fully acquire the company in a deal valued at USD 60 billion.

In January 2024, APA Corporation signed an agreement to acquire local competitor Callon Petroleum Company in a deal valued at around USD 4.5 billion.

Other acquisitions include Occidental Petroleum buying CrownRock for USD 12 billion and Chesapeake Energy merging with Southwestern Energy for USD 7.4 billion.