Diamondback Nears Permian Deal to Purchase Shale Producer Double Eagle

Last updated: 2025/02/17 at 4:43 PM

Editorial Team 4 weeks ago

Diamondback Power Inc. is closing in on a deal to amass intently held West Texas oil producer Double Eagle in a bid to additional its dominance on the planet’s greatest shale patch, in line with folks conversant in the matter.

Diamondback, the most important unbiased oil and fuel producer within the Permian Basin, plans to formally announce the deal for Double Eagle as early as Tuesday morning, stated the folks, who requested to not be recognized as a result of the main points are personal. The transaction may very well be valued at greater than $5 billion, the Wall Avenue Journal reported Friday, citing unnamed sources.

Representatives for Diamondback and Double Eagle each declined to remark.

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The deal comes roughly a 12 months after Diamondback introduced its largest-ever transaction, the acquisition of Endeavor Power Sources LP. The deal closed in September for about $28 billion. Since then, Diamondback has been among the many worst-performing members of the S&P 500 Power Index, down about 8%, amid concern that the household of Endeavor founder Autry Stephens could promote extra of Diamondback’s inventory it gained within the deal.

Shale deal-making had been anticipated to sluggish after $300 billion in acquisitions over the previous couple of years had consolidated the obtainable targets, in line with trade guide Enverus.

Double Eagle, whose personal fairness backers have included EnCap Investments LP, is likely one of the final massive intently held producers to be taken over within the Permian, which stretches throughout West Texas and southeastern New Mexico.

As soon as the spine of progress within the shale patch, intently held producers are increasing output at a slower tempo as personal fairness exits the area. Capital raised by personal fairness corporations in vitality, which averaged $21 billion a 12 months from 2010 via 2019, has tumbled since, averaging about $6 billion yearly, in line with Quantum Capital Group LLC.

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