(AOF) – American shale oil producer, Diamondback Energy (+9.97% to $166.87) jumped to the S&P500 after announcing this Monday the conclusion of an agreement for the purchase of Endeavor (oil and gas company independent of Texas) in shares and cash. The two groups will merge in a deal valued at around $26 billion, including debt. This merger will thus create a leading independent operator in the Permian Basin region in the United States.
Consideration for the transaction will include approximately 117.3 million shares of Diamondback common stock and $8 billion in cash.
Upon completion of the transaction, Diamond backEnergy shareholders are expected to own approximately 60.5% of the combined company and Endeavor shareholders approximately 39.5%.
Diamondback Energy expects the merger to be completed in the fourth quarter of 2024.
The combined company will have the capacity to produce 816,000 barrels of oil equivalent per day (mboe/day). It will be able to achieve annual synergies of $550 million, or a net value of more than three billion dollars over the next decade.
On the outlook side, in 2024, Diamondback alone forecasts oil production of 458 to 466 mboe/day with a total investment budget of approximately $2.3 to $2.55 billion.
Starting in the first quarter of 2024, Diamondback intends to distribute at least 50% of free cash flow to its shareholders, compared to at least 75% previously.
On the other hand, the energy firm announced that its board of directors will approve a 7% increase in its base dividend to $3.60 per share annually ($0.90 per share quarterly), starting in the fourth quarter of 2023.
This transaction between Diamondback Energy and Endeavor follows the announcement in October of two other acquisitions by two American multinationals in the oil sector.
The oil and gas company ExxonMobil had confirmed the acquisition of shale specialist Pioneer Natural Resources for around $60 billion.
For its part, Chevron announced an agreement to buy Hess for $53 billion.
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