Diamondback Energy Nears Deal for Double Eagle to Expand Permian Dominance
Diamondback Energy Inc. is reportedly finalizing an acquisition of independent oil producer Double Eagle, strengthening its position as the leading independent producer in the Permian Basin. Sources familiar with the negotiations claim that the deal could exceed $5 billion in value.
The acquisition expands Diamondback's already extensive footprint in the Permian, a prolific shale region spanning West Texas and New Mexico. Double Eagle is a privately held producer backed by EnCap Investments LP and represents one of the last remaining large independent targets in the region.
The transaction follows Diamondback's record-breaking acquisition of Endeavor Energy Resources LP in September 2022, which closed at approximately $28 billion. Since then, concerns over the potential sale of Diamondback shares by the family of Endeavor founder Autry Stephens have contributed to its underperformance in the S&P 500 Energy Index.
Despite the anticipated slowdown in shale deal-making, Double Eagle's acquisition demonstrates the ongoing consolidation of producers in the Permian. Private equity investment in the energy sector has declined significantly since 2019, leading to a slower expansion of privately held producers.
As Diamondback formalizes the deal, expected to be announced as early as Tuesday morning, it will enhance its dominance in the world's largest shale patch and solidify its position as a major player in the global oil and gas industry.