< Back to 68k.news US front page

Two Big Texas Oil Producers Announce $26 Billion Merger

Original source (on modern site) | Article images: [1] [2]

Business|Two Big Texas Oil Producers Announce $26 Billion Merger

https://www.nytimes.com/2024/02/12/business/diamondback-energy-endeavor-energy-permian-basin.html

You have a preview view of this article while we are checking your access. When we have confirmed access, the full article content will load.

Diamondback Energy and Endeavor Energy Resources are both major players in the booming Permian Basin.

The Permian Basin, which straddles New Mexico and Texas, has become the most productive oil field in the United States.Credit...Bing Guan/Reuters

Two large Texas oil producers are joining forces in a deal valued at $26 billion, the latest in a wave of consolidation in the U.S. energy industry.

Diamondback Energy and Endeavor Energy Resources, both major players in the booming Permian Basin oil field that straddles New Mexico and Texas, announced on Monday that they would merge in a cash-and-stock deal, with Diamondback's shareholders owning about 60 percent of the combined company.

The Permian Basin was once seen as a worn-out patch. But over the last decade or so, technological advances, including the advent of fracking, or hydraulically fractured horizontal wells, have opened its oil- and gas-rich shale fields to development. The basin has been transformed into the most productive oil and gas field in the United States.

"With this combination, Diamondback not only gets bigger, it gets better," Travis Stice, the company's chief executive, said in a statement. The news sent Diamondback's shares up 10 percent.

Diamondback Energy, which was founded in 2007 and has been publicly traded since 2012, reported that it had $9.6 billion in revenue, primarily from oil, and more than $4 billion in profit in its last fiscal year. It has a market value of about $27 billion.

"Diamondback was built through an acquire-and-exploit strategy," Mr. Stice wrote in a letter to shareholders in November. He added that being a "low-cost operator" was the company's strength, and that "we expect Diamondback to remain a consolidator in the future."

Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.

Thank you for your patience while we verify access.

Already a subscriber? Log in.

Want all of The Times? Subscribe.

< Back to 68k.news US front page