©Reuters. The sun rises behind an oil tanker as it moves through the Permian Basin in Mentone, Texas, on November 26, 2019. Photographed on November 26, 2019.Reuters/Angus Mordaunt/File photo
Written by Anirban Sen
(Reuters) – U.S. shale oil rivals Diamondback (Nasdaq:) Energy and Endeavor Energy Resources have agreed to a roughly $25 billion cash-and-stock deal to create an oil and gas company worth more than $50 billion. Officials said they are nearing a final decision. Sunday.
Diamondback could announce a deal as soon as Monday that would give shareholders a majority stake in the combined company, making it the Permian shale's largest pure-play oil producer, the people said.
Reuters reported in December that Endeavor Energy Partners was considering a sale of the Permian Basin's largest private oil and gas producer at a valuation of $25 billion to $30 billion.
Endeavor and Diamondback did not immediately respond to requests for comment.
The combined company will be the third largest oil and gas producer in the Permian region, the largest oil field in the United States, spanning West Texas and New Mexico.Oil and gas volumes will be delayed exxon mobil (New York Stock Exchange:) and chevron (NYSE:), announced recent transactions.
pressure to bond
“This is a layup in terms of acreage overlap and compatibility,” said Dan Pickering, chief investment officer of Pickering Energy Partners. The combined company will be pioneer natural resources (NYSE:) has been acquired by Exxon as the top single producer in the Permian, he said.
Permian producers are consolidating in a race to secure future drilling inventories and production from the nation's top oil fields. Analysts say the deal is likely to put further pressure on the remaining companies to consolidate for efficiency and scale.
But Andrew Dittmer, senior vice president at data analytics firm Enverus, said future deals are unlikely to match the size of the Permian shale deals in recent months. He ruled out competing bids for Endeavor.
Leveraging Diamondback's cash and stock will allow Endeavor founder Autry Stevens and his family to maintain a key role in the largest oil company in Midland, Texas, where both companies are based, Dittmer said. Ta.
“Their (drilling) inventory is very high quality and the combined company will be a very attractive investment for Wall Street. We expect it to be well received in the market on Monday,” he said.
Diamondback fended off competition from other parties, including ConocoPhillips (NYSE:), the Wall Street Journal earlier reported.
The sale comes nearly 45 years after Texas oil company Stevens founded what would become Endeavor.
Endeavor's operations span 350,000 acres (1,416 square kilometers) in the Midland portion of the Permian Basin.
Mr. Stevens, a former appraisal engineer, became known for his appearance on the television documentary series “Black Gold,” where he acquired a competitor's deserted land and mined it for oil and gas at a profit. We grew the company.
To lower production costs, Stevens created and utilized his own fracking, construction, trucking, and other service companies.
