Diamondback Energy, Inc. FANG, a prominent U.S. oil player, is reportedly in discussions to acquire Double Eagle, a West Texas crude producer. This potential acquisition, valued at over $5 billion, highlights Diamondback's commitment to strengthening its foothold in the prolific Permian Basin, the country’s largest oil field.
If no new possible buyer emerges or the talks don’t fall apart, the acquisition deal may be finalized in a few days.
Backed by private equity firm EnCap Investments, Double Eagle manages more than 95,000 net acres in the Midland portion of the Permian Basin. Last year, Double Eagle was exploring sale opportunities for its Permian-based producer in a deal that could be worth more than $6.5 billion, including debt.
The oil sector has witnessed a surge in consolidation activities over the past few years. The prospective purchase of Double Eagle by Diamondback Energy further signals that consolidation within the energy sector is accelerating. Diamondback is aligned with the trend of mergers and acquisitions to strengthen its position in the oil industry, particularly in high-potential regions like the Permian Basin. The proposed $5 billion acquisition follows a similar acquisition in September 2024 when Diamondback Energy purchased Endeavour Energy Resources in a $26 billion cash and stock deal to create an oil and gas company valued at over $50 billion.
Diamondback Energy focuses on growth through a combination of acquisitions in the lucrative Permian Basin spread over West Texas and New Mexico. Since its inception in 2007, Diamondback Energy has experienced remarkable growth, focusing primarily on the Permian Basin with more than 490,000 net acres. The potential purchase of Double Eagle would not only enhance Diamondback's asset portfolio but also position it as one of the leading producers in the Permian Basin.
Texas-based Diamondback Energy is an independent oil and gas exploration & production company. Currently, FANG has a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some top-ranked stocks like SM Energy Company SM, Prairie Operating Co. PROP and Gulfport Energy Corporation GPOR.While SM Energy and PROP currently sport a Zacks Rank #1 (Strong Buy) each, Gulfport Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Denver, CO-based SM Energy Company is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition and production of natural gas and crude oil in North America. The Zacks Consensus Estimate for SM’s 2024 earnings indicates 15.11% year-over-year growth.
Houston-based Prairie Operating is an independent energy company engaged in the development and acquisition of proven, producing oil and natural gas resources principally in the United States. The Zacks Consensus Estimate for PROP’s 2024 earnings indicates 81.19% year-over-year growth.
Gulfport Energy is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North America. The Zacks Consensus Estimate for GPOR’s 2024 earnings indicates 108.53% year-over-year growth.
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