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The latest multi-billion Dollar energy sector acquisition will see Diamondback Energy purchasing former rival Endeavor Energy Resources, expanding its presence in US’s critical Permian shale basin by 350 acres. Diamondback reportedly fended off a competing bid from ConocoPhillips. Further consolidation of North American E&P comes as the continent’s oil rig count is stagnating and the EIA has forecast zero growth in US crude output for 2024. MRP posited late last year that a wave of energy sector dealmaking among large drillers could exacerbate slowing production growth in crude oil, as many energy majors around the world are shifting focus away from output and toward profitability.

Related ETF: Energy Select Sector SPDR Fund (XLE)

Another major oil and gas major focused on the US shale resources was announced yesterday, as E&P firm Diamondback Energy will acquire former rival Endeavor Energy Resources in a $26 billion cash and stock deal. Diamondback will emerge from the deal a $50 billion oil and gas heavyweight with capacity for 400,000 barrels per day (bpd), up nearly 54% from 260,000 bpd at current. Total production of the combined entity’s oil and natural gas is estimated at 816,000 barrels of oil equivalent per day.

In placing its winning bid for Endeavor, Diamondback fended off ConocoPhillips, which also sought to purchase the company. This is indicative of a persistent appetite for M&A in the energy sector, particularly targeting assets in the US’s Permian shale basin. Bloomberg data indicated that the fourth quarter of 2023 was the most lucrative ever for energy sector M&A, with a total of 227 deals valued at $163.1 billion being announced. This sum has…

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