Diamondback Energy on agreed to buy privately held Endeavor Energy Resources on Monday for $26 billion including debt, creating a new Permian Shale giant and the latest in a flurry of big recent energy deals. FANG stock jumped.
Diamondback will pay 117.3 million FANG shares and $8 billion cash for Endeavor, founded by wildcatter Autry Stephens. Existing Diamondback holders will own 60.5% of the combined company.
The agreement confirms Sunday reports that a deal was close.
Diamondback Energy reportedly fended off other Endeavor suitors, including ConocoPhillips.
Diamondback hiked its annual dividend by 7% to $3.60 a share. But it'll reduce its return of capital commitment to 50% of free cash flow starting in Q1, vs. 75% previously.
Other Energy Deals
Last October, Exxon Mobil agreed to buy Permian Shale giant Pioneer Natural Resources for $59.5 billion in an all-stock deal. Including debt, the Exxon-Pioneer deal was $64.5 billion. Later that month, Dow giant Chevron announced a $53 billion deal for Hess, which has significant reserves in Guyana.
In other recent deals, Occidental Petroleum late last year agreed to buy privately held CrownRock for $10.8 billion. APA Corp.in January sealed a $4.5 billion takeover agreement with smaller rival Callon Petroleum.
Diamondback Stock
Diamondback Energy stock leapt 9.4% to 165.98 on Monday, vaulting above its 50-day line as well as a trendline entry and various short-term highs.
FANG stock has a 171.40 buy point in a consolidation going back to October 2023, but has been moving sideways since mid-2022.
Shares rose 1% last week to 151.74.
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