Diamondback Energy has a deal in place to purchase Endeavor Energy Resources, a private oil producer in America, for about $25bn. This is according to sources familiar with the situation. ConocoPhilips lost out in this race to acquire one of America’s top private oil producers.
The deal, which could be announced on Monday, will make Midland-based Diamondback one of the largest players in the vast Permian basin of Texas and New Mexico – the largest US oilfield.
Diamondback has reportedly completed a deal with Conoco after weeks of competing to buy Endeavor , owned by Autry Stephens , a wild-card billionaire .
Diamondback would have a huge win if it could beat Conoco. Conoco has a capitalisation market of $132 billion, while Diamondback is only valued at $27bn. Last year, Diamondback lost to Occidental Petroleum, another larger rival, in its bid to acquire CrownRock.
Occidental, backed by Warren Buffett , announced a deal worth $12bn in December for CrownRock, another highly sought after private producer.
Diamondback, Endeavor and Conoco did not reply to our requests for comment. Wall Street Journal reported the advanced talks for the first time on Sunday.
This deal is the latest in an avalanche of mergers and acquisitions in the US Shale Patch as companies try to grab the best drilling acreage.
ExxonMobil announced a $60bn deal to purchase Pioneer Natural Resources in October. Pioneer Natural Resources is the largest player in the Permian. Chevron announced shortly after, a $53bn deal to acquire Hess. This company has assets in North Dakota’s Bakken Shale and a stake off the coasts of Guyana, South America, in the largest oil discovery of the last decade.
Chesapeake Energy has agreed to purchase Southwestern Energy from Southwestern Energy , for $7.4bn. This will create the largest natural gas producer in the United States.
Stephens founded Endeavor in 2000. He had built his business from a single rig in 1979. It grew into one of the largest private operators in the nation, along with CrownRock and Mewbourne Oil.
Stephens has put the company on the market several times over the years. However, no potential buyer has ever made an offer that was sufficient to satisfy him.
Endeavor, like other private players has increased its output in recent years. This is because publicly listed competitors have been holding back on drilling due to pressure from Wall Street. Endeavor produced more than 400,000 barrels equivalent of oil per day at the end of last season, compared to many other public companies.
Private oil groups such as Endeavor have helped to drive US production up to record levels. In November, the last available month of data from the Energy Information Administration for this country, it pumped more oil than any other country in history.