By Benoît Morenne and Lauren Thomas

Diamondback Energy is in talks to buy Double Eagle, a big West Texas crude producer, a sign consolidation in the country's biggest oil patch isn't slowing down.

The details

A deal could be announced in the coming days, granted the talks don't fall apart, according to people familiar with the matter. It is also possible another suitor could emerge.

Double Eagle, backed by private-equity firm EnCap Investments, could be valued at more than $5 billion in the transaction, the people said.

Fort Worth-based Double Eagle owns more than 95,000 net acres in the Midland portion of the Permian Basin and is one of the last big assets left in the region, the largest U.S. oil field. The team running it has been a prolific aggregator of properties in the oil patch, cobbling together acreage into large positions it then flips to larger rivals.

Diamondback, based in Midland, Texas, has a market value of around $47 billion. The company last year acquired Permian producer Endeavor Energy Resources in a cash-and-stock deal that valued Endeavor at around $26 billion.

The context

The oil patch has seen a frenzy of deals in the past couple of years as companies have sought to add new wells to their depleting inventories, and investors have urged them to scale.

The transactions have reshaped the Permian, once the domain of unruly frackers who drilled themselves into bankruptcy. A decade ago, 30 companies produced about a third of the oil field's crude. Last year, Exxon Mobil, Diamondback Energy and Occidental Petroleum cranked out a similar share of the basin's output.

Diamondback, once a middling player, has emerged as a dominant force in the Permian, with a market capitalization now on par with that of Hess and Occidental.

Write to Benoît Morenne at benoit.morenne@wsj.com and Lauren Thomas at lauren.thomas@wsj.com

(END) Dow Jones Newswires

February 14, 2025 13:40 ET (18:40 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.