Diamondback Energy and Endeavor Energy Resources merge to create independent oil and gas company

The combination will create a premier Permian independent operator.

The transaction consideration will consist of approximately 117.3 million shares of Diamondback common stock and US$8 billion of cash, subject to customary adjustments. The cash portion of the consideration is expected to be funded through a combination of cash on hand, borrowings under the Company’s credit facility and/or proceeds from term loans and senior notes offerings. As result of the transaction, the Company’s existing stockholders are expected to own approximately 60.5% of the combined company and Endeavor’s equity holders are expected to own approximately 39.5% of the combined company.

The transaction was unanimously approved by the Board of Directors of the Company and has all necessary Endeavor approvals.

“This is a combination of two strong, established companies merging to create a ‘must own’ North American independent oil company. The combined company’s inventory will have industry-leading depth and quality that will be converted into cash flow with the industry’s lowest cost structure, creating a differentiated value proposition for our stockholders,” stated Travis Stice, Chairman and Chief Executive Officer of Diamondback. “This combination meets all the required criteria for a successful combination: sound industrial logic with tangible synergies, improved combined capital allocation and significant near and long-term financial accretion. With this combination, Diamondback not only gets bigger, it gets better.”

Mr. Stice continued, “Over the past forty-five years, Mr. Stephens and his team at Endeavor have built the highest quality private oil company in the United States. 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. As a result, we look forward to continuing to deliver best-in-class results with a combined employee base headquartered in Midland, assuring Midland’s relevance in the global oil market for the next generation.”

“I am grateful to the Endeavor team and proud of what we have built since 1979,” said Autry C. Stephens, Founder and Chairman of the Board of Endeavor. “We believe Diamondback is the right partner for Endeavor, our employees, families and communities. Together we will create value for shareholders and our other stakeholders.”

“As we look toward the future, we are confident joining with Diamondback is a transformational opportunity for us,” said Lance Robertson, President and Chief Executive Officer of Endeavor. “Our success up to this point is attributable to the dedication and hard work of Endeavor employees, and today’s announcement is recognition by Diamondback of the significant efforts from our team over the past seven years, driving production growth, improving safety performance and building a more sustainable company. We look forward to working together to scale our combined business, unlock value for all of our stakeholders and ensure our new company is positioned for long-term success as we build the premier Permian-focused company in Midland.”

Read the article online at: https://www.oilfieldtechnology.com/special-reports/13022024/diamondback-energy-and-endeavor-energy-resources-to-merge-to-create-a-permian-independent-oil-and-gas-company/