Diamondback Energy will attempt to buy rival Endeavor Energy Resources to create an energy giant in the Southwestern United States worth more than $50 billion
Diamondback Energy will attempt to buy rival Endeavor Energy Resources to create an energy giant in the Southwestern United States worth more than $50 billion.
Growing confidence in an economic recovery, particularly in the U.S., has driven massive deals in the energy sector in recent months, including Chevron's $53 billion acquisition of Hess in October, and a $59.5 billion deal two weeks before that by Exxon Mobil, its biggest acquisition since buying Mobil two decades ago.
A tie-up between Diamondback and Endeavor, if it succeeds, would create a player in the massive Permian Basin oil and gas field that straddles Texas and New Mexico.
It would be the third largest producer in the Permian behind Exxon and Chevron, overseeing 838,000 acres and potentially producing 816,000 oil-equivalent barrels each day.
Diamondback said Monday that it will buy Endeavor in a cash-and-stock deal valued at about $26 billion.
Endeavor is the largest private operator in the Permian Basin. Drillers can pull more than 4 million barrels of oil equivalent from the Permian daily and the rush is on to secure prime real estate in the largest oil field in the United States with little sign that the U.S. economy is slowing as many had expected.
“We have evaluated every deal in the Permian Basin over the past decade and there has not been another opportunity that has come close to this scale and quality,” Diamondback Chairman and CEO Travis Stice said during a conference call.
Despite broad expectations that it would dip into recession in a turbulent global economy, the U.S. has proven
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