$25 billion deal: Latest US Permian acquisition could be announced today

US independent Diamondback Energy is reportedly close to acquiring compatriot Endeavor Energy Resources in a $25 billion deal that would create one of the largest producers in the nation’s Permian shale basin.

Midland, Texas-based Diamondback is said to have beaten ConocoPhillips for Endeavor after last year losing to another rival, Occidental Petroleum, in its bid for CrownRock.

The acquisition, which could be announced as soon as Monday, would transform Diamondback into a leading player in the Permian basin in Texas and New Mexico, the US’ largest oil patch, reported the Wall Street Journal.

Endeavor has an asset position of approximately 470,000 net acres across multiple basins, inclusive of 344,000 net acres in the core six Midland basin counties in the Permian.It was producing around 400,000 barrels of oil equivalent per day towards the end of last year, according to the Financial Times.

"Their (drilling) inventory is extremely high quality that will make the combined companies a very attractive investment on Wall Street. I imagine it will be well received by the market on Monday," Andrew Dittmar, a senior vice president at data analytics firm Enverus, told Reuters

Diamondback is said to be putting the finishing touches to a deal, after weeks of weeks of battling with other suitors — most notably ConocoPhillips — to buy Endeavor, which is owned by billionaire Autry Stephens.

The touted cash and stock deal would create an oil and gas company valued at more than $50 billion, sources said on Sunday, according to Reuters.

Upstream has requested comment from Diamondback via the company’s out-of-hours employee-manned switchboard and is awaiting a call back.

Meanwhile, a call to Endeavor’s head office at the time of publication informed there was no one available outside of normal working hours and Upstream was unable to leave a message on the company’s phone system.

The combined company would be the third-largest oil and gas producer in the Permian, behind ExxonMobil and Chevron.

"This is a layup in terms of the acreage overlap and fit," Dan Pickering, chief investment officer of Pickering Energy Partners, told Reuters.

The combined company would replace Pioneer Natural Resources, which is being acquired by ExxonMobil, as the top solely Permian producer, he said.

The US has been a hotbed of M&A activity in recent months.

ExxonMobil is acquiring for $60 billion Pioneer Natural Resources, the biggest player in the Permian; while Chevron is stumping up $53 billion to buy Hess, which has assets in North Dakota’s Bakken shale and offshore Guyana.