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Diamondback Deal Forges New Permian Giant

Diamondback Deal Forges New Permian Giant


Diamondback Energy (CROC) agreed Monday to buy privately held Endeavor Energy Resources for $26 billion, including debt, creating a new Permian shale giant and the latest in a wave of recent big energy deals. FANG stock rose slightly.




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Diamondback will pay 117.3 million FANG shares and $8 billion in cash for Endeavor, founded by wildcat Autry Stephens. Existing Diamondback holders will own 60.5% of the combined company.

The agreement confirms reports on Sunday that a deal had been reached.

Diamondback Energy reportedly fended off other Endeavor suitors, including ConocoPhillips (COP).

Diamondback increased its annual dividend by 7%, to $3.60 per share. But it will reduce its capital repayment commitment to 50% of free cash flow from the first quarter, down from 75% previously.

Other energy offers

Last October, Exxon Mobile (XOM) agreed to buy the Permian shale giant Pioneering natural resources (PXD) for $59.5 billion in an all-stock transaction. Including debt, Exxon-Pioneer agreement was $64.5 billion. Later that month, the Dow giant Chevron (CLC) announced a $53 billion deal For Hesse (HE IS), which has significant reserves in Guyana.

In other recent transactions, Western oil (OXY) late last year agreed to buy privately held CrownRock for $10.8 billion. APA Corp. (WHAT)in January, it struck a $4.5 billion buyout deal with a smaller rival. Callon Petroleum (CPE).

Diamondback Action

Diamondback Energy stock rose 1.6% early Monday.

Shares rose 1% last week to 151.74, but closed below their 50-day moving average on Friday. FANG stock has a buy point of 171.40 during a consolidation dating back to October 2023, but has been moving sideways since mid-2022.

Please follow Ed Carson on the discussions at @edcarson1971 and X/Twitter on @IBD_ECarson for stock market updates and more.

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