Diamondback approaches a Permian contract to buy Shale producer Double Eagle

(Bloomberg) – Diamondback Energy Inc. has closely held West Texas oil producer Double Eagle to promote its advantage in the world’s largest shale patch, according to people familiar with the issue. We have concluded a contract.

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Diamondback, the Permian Basin’s largest independent oil and gas producer, is set to officially announce a Double Eagle deal as early as Tuesday morning, not to be identified as details are private. Those who asked said. The deal could be valued at over $5 billion, The Wall Street Journal reported Friday, citing an unknown source.

Diamondback representatives did not immediately respond to requests for comment. A representative for Double Eagle declined to comment.

The deal comes about a year after Diamondback announced its acquisition of Endeavor Energy Resources LP, the biggest deal in history. The deal ended in September with around $28 billion. Since then, Diamondback has been one of the worst performance members of the S&P 500 Energy Index amid concerns that Endeavor founder Autry Stephens could sell more of the Diamondback stocks he earned in the trade. .

Shale’s deal production was expected to be slower due to a $300 million acquisition over the past few years, according to industry consultant Emberus.

Includes Encap Investments LP in private equitybackers, Double Eagle is one of the last big, closely held producers to take over the Permian period, spreading across West Texas and southeastern New Mexico.

As the shale patch growth backbone enters, closely held producers expand their output at a slower pace as private equity leaves the space. According to Quantum Capital Group LLC, the average annual capital raised by energy companies from 2010 to 2019 is around $6 billion in capital raised by energy private energy companies annually.

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