Diamondback Energy Expands in the Permian Basin

Diamondback Energy announced a $4.08 billion cash-and-stock deal to acquire certain units of Texas-based Double Eagle. This acquisition bolsters Diamondback’s footprint in the Permian Basin, the largest oil-producing region in the U.S.

Key Highlights of the Deal

• Double Eagle owns over 95,000 net acres in the Midland Basin, one of the last large oil assets in the Permian.
• Diamondback plans to sell at least $1.5 billion in non-core assets to reduce debt.
• Post-acquisition net debt is expected to drop to $10 billion, with a long-term leverage target of $6B–$8B.

The Permian Basin’s Growing Importance

The Permian Basin remains critical to U.S. oil production, housing some of the most lucrative shale assets. Double Eagle’s sale follows reports from Reuters in 2023, which estimated its value at over $6.5 billion, including debt.

Diamondback’s Strategic Move

With this acquisition, Diamondback Energy strengthens its position in the shale industry. By reducing debt and focusing on high-value assets, the company aims to enhance operational efficiency and maintain long-term growth.

Future Outlook for U.S. Oil and Gas Sector

As M&A activity accelerates in the oil and gas industry, companies are focusing on asset optimization and debt reduction. With the Permian Basin still a prime target, this deal signals continued consolidation among top energy producers.