Diamondback Energy to Buy Endeavor for $26 Billion

San Francisco, Feb 12 (AP) Diamondback Energy will buy rival Endeavor Energy Resources in a cash-and-stock deal valued at about USD 26 billion to create a drilling giant in the Southwest United States.

Growing confidence in an economic recovery, particularly in the US, is driving massive deals in the energy section in recent months, including a Chevron's USD 53 billion acquisition of Hess, and a USD 59.5 billion deal two weeks before by Exxon Mobil, it's biggest acquisition since buying Mobil two decades ago.

The Diamondback, Endeavor deal confirmed Monday includes approximately 117.3 million shares of Diamondback common stock and USD 8 billion in cash, and will create a huge operator in the Permian Basin that straddles Texas and New Mexico.

“Diamondback has proven itself to be a premier low-cost operator in the Permian Basin over the last twelve years, and this combination allows us to bring this cost structure to a larger asset and allocate capital to a stronger pro forma inventory position," Diamondback Chairman and CEO Travis Stice said in a prepared statement.

Shareholders of Diamondback Energy Inc. are expected to own about 60.5 per cent of the combined company, while Endeavor's equity holders are anticipated to own approximately 39.5 per cent.

The combined company will be based in Midland, Texas.

“Our companies share a similar culture and operating philosophy and are headquartered across the street from one another, which should allow for a seamless integration of our two teams,” Stice said.

The boards of both companies approved the deal, which is expected to close in the fourth quarter. It also has all of the necessary Endeavor approvals, the companies said. (AP)