American shale oil producers Diamondback Energy Inc. and Endeavor Energy Resources announced about the merger. The transaction amount, taking into account Endeavor's debts, will be approximately $26 billion. As a result of the merger, a new player will appear on the market with a market value of about $50 billion. The combined company will become one of the largest oil producers in the Permian Basin with a production volume of approximately 400 thousand barrels per day.
As part of the deal, Diamondback will pay $8 billion in cash and also give away 117.3 million of its common shares. In this case, the company will have to raise borrowed funds. As a result, current Diamondback shareholders are expected to own approximately 60.5% of the combined company, and Endeavor shareholders will own 39.5%.
This is not the first major deal in the oil sector in recent months. So, in October last year, ExxonMobil announced about the purchase of Pioneer for almost $60 billion. In the same month, Chevron bought shale oil producer Hess for $53 billion Occidental Petroleum late last year announced about the purchase of CrownRock for $12 billion.
Last month, energy company APA agreed to buy the smaller Callon Petroleum in a deal valued at about $4.5 billion. Finally, on January 22, US fuel trading company Sunoco announced on the purchase of NuStar Energy, an operator of pipelines and oil storage facilities. The transaction amount was $7.3 billion.
U.S. oil and gas companies are actively pursuing mergers and acquisitions as they accumulate significant cash reserves thanks to rising fuel prices and expect lower U.S. interest rates. Thus, according to Dealogic, the volume of M&A transactions in the United States since the beginning of the year is already 78% higher than last year’s figure for the same period of time.
Read more about the US oil market in the Kommersant publication. "Time to Collect Barrels".