Diamondback Energy Expands Permian Presence with $4.08 Billion Deal

Diamondback Energy, Inc. (NASDAQ: FANG) has announced a significant expansion in the Permian Basin with a $4.08 billion deal to acquire certain subsidiaries of Double Eagle IV Midco, LLC. This strategic move will strengthen Diamondback's position in the region and enhance its production profile. The acquisition, valued at approximately 5.2x 2025 EBITDA, is expected to close on April 1, 2025, subject to customary closing conditions and regulatory approvals.

The acquired assets consist of approximately 40,000 net acres in the core of the Midland Basin, with an estimated run-rate production of around 27 MBo/d (69% oil). This addition will extend Diamondback's pro forma inventory life in the core of the Midland Basin and provide a longer runway for development and production. The acquired assets also come with 407 gross (342 net) horizontal locations in primary development targets, with an average lateral length of approximately >11,000 feet. Additionally, there are 44 gross upside locations primarily located in emerging zones, further enhancing Diamondback's production profile.

As part of the agreement, Diamondback and Double Eagle have agreed to accelerate development on a portion of Diamondback's non-core southern Midland Basin acreage. This acceleration is expected to bring forward Net Asset Value (NAV) to Diamondback by developing Diamondback's lower quality acreage at a faster pace than current expectations. This should lead to significant Free Cash Flow growth in 2026 and beyond with minimal capital deployment through this accelerated development plan.

The acquisition also allows for meaningful lateral length extensions and infrastructure synergies, further enhancing Diamondback's production profile and operational efficiency. Diamondback is expected to fund the transaction through a combination of cash on hand, borrowings under the Company's credit facility, and/or proceeds from term loans and senior notes offerings.

Diamondback Energy's expansion in the Permian Basin is a strategic move that will strengthen its position in the region and enhance its production profile. The acquisition of Double Eagle IV Midco's assets will extend Diamondback's inventory life, increase overall output, and create opportunities for accelerated development and cost synergies. This deal is expected to be immediately accretive to all relevant financial metrics, including Cash Flow per share, Free Cash Flow per share, and NAV per share. Diamondback's commitment to selling at least $1.5 billion of non-core assets will also help maintain its strong balance sheet and reduce net debt to $10 billion.



Diamondback Energy's expansion in the Permian Basin is a strategic move that will strengthen its position in the region and enhance its production profile. The acquisition of Double Eagle IV Midco's assets will extend Diamondback's inventory life, increase overall output, and create opportunities for accelerated development and cost synergies. This deal is expected to be immediately accretive to all relevant financial metrics, including Cash Flow per share, Free Cash Flow per share, and NAV per share. Diamondback's commitment to selling at least $1.5 billion of non-core assets will also help maintain its strong balance sheet and reduce net debt to $10 billion.