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HomeBusinessTexas Oil Giants Merge in $26 Billion Deal

Texas Oil Giants Merge in $26 Billion Deal

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Two of Texas’ major oil producers, Diamondback Energy and Endeavor Energy Resources, have revealed their plans to combine forces in a deal worth $26 billion. This consolidation, which is among many taking place in the U.S. energy industry, will create a company that owns a considerable portion of the booming Permian Basin oil field that spans New Mexico and Texas.

The Permian Basin has seen a resurgence in the past decade due to technological advancements that have opened up its abundant oil and gas fields to development. This transformation has turned the basin into the most productive oil and gas field in the United States, prompting Diamondback to call the merger a move that makes the company not just bigger, but better.

With Diamondback’s shareholders to own about 60 percent of the combined company, the deal is expected to close in the fourth quarter of the year, subject to regulator and shareholder approvals. One driving force behind this wave of consolidation is the industry-wide acknowledgement that global demand for fossil fuels is on the decline, leading to companies racing to consolidate in order to improve options and reduce costs. This acquisition is part of a larger trend in the Permian Basin, with other major players such as Exxon Mobil and Chevron also having made significant deals.

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