Diamondback Energy Nears Permian Deal to Buy Shale Producer Double Eagle

Diamondback Energy Inc. is reportedly in advanced talks to acquire Double Eagle Energy Permian LLC, a privately-held Permian Basin producer, in a deal valued at more than $5 billion. The acquisition, if finalized, would significantly expand Diamondback's presence in the Permian Basin, the most prolific U.S. oilfield.

Double Eagle, backed by private-equity firm EnCap Investments LP, owns over 95,000 net acres in the Midland basin, making it one of the largest assets in the Permian basin. The acquisition would hold a value of more than $5 billion if the deal is finalized, according to sources familiar with the situation.

The potential acquisition comes just months after Diamondback Energy acquired Endeavor Energy Resources LP for $26 billion, further expanding its Permian operations and setting its combined value at close to $50 billion. Both Diamondback and Double Eagle declined to comment on the reports.

The Permian Basin has seen a wave of consolidation in recent months, with major oil and gas companies acquiring smaller producers to secure prime drilling locations and reduce costs. ExxonMobil, Chevron, and Occidental Petroleum have all made significant acquisitions in the region, and Diamondback's potential acquisition of Double Eagle would continue this trend.

The Permian Basin, located in West Texas and southeastern New Mexico, is the cornerstone of U.S. oil production growth. The nation's output surged to a record high last year, thanks largely to wells in the Permian that can be drilled and fracked cheaper and faster than those in many other regions. Oil remains in high demand globally, with consumption expected to rise through 2030 — and perhaps beyond.

The acquisition of Double Eagle by Diamondback would create a leading operator in the Permian Basin, with a combined footprint of over 1 million net acres and daily production of over 1 million barrels of oil equivalent. The deal is expected to generate significant synergies, with Diamondback estimating annual cost savings of over $300 million.

The acquisition would also advance Diamondback's ESG profile, as Double Eagle has a strong track record in environmental stewardship and community engagement. The combined company would be well-positioned to lead the industry in sustainability and responsible development.

In conclusion, the potential acquisition of Double Eagle by Diamondback Energy would further consolidate the Permian Basin, creating a leading operator with a strong ESG profile and significant synergies. The deal would continue the trend of major oil and gas companies acquiring smaller producers to secure prime drilling locations and reduce costs, as the Permian Basin remains the cornerstone of U.S. oil production growth.