Diamondback Energy has announced a $4.08 billion cash-and-stock acquisition of select subsidiaries of Double Eagle IV Midco, LLC, a move that strengthens its position in the oil-rich Permian Basin. The deal will add approximately 40,000 net acres in the core of the Midland Basin, one of the most sought-after shale regions in the U.S.
This acquisition follows Diamondback’s $26 billion purchase of Endeavor Energy Partners last year, making it the third-largest oil and gas producer in the Permian. With consolidation continuing in the region, this latest deal underscores Diamondback’s strategy to expand its high-quality drilling inventory while maintaining financial discipline.
Despite calls from political leaders, including President Donald Trump’s push to “drill, baby, drill,” growth in U.S. oil production is expected to slow by at least 25% in 2025. Producers are prioritizing financial stability over rapid expansion, focusing on disciplined spending and maximizing cash flow. This transaction aligns with that trend, as Diamondback secures valuable acreage while committing to reduce debt through non-core asset sales.
Diamondback will fund the deal with approximately 6.9 million shares and $3 billion in cash, with the latter financed through a combination of cash on hand, credit facility borrowings, and potential proceeds from term loans and senior notes offerings. To maintain balance sheet strength, the company has pledged to sell at least $1.5 billion in non-core assets, targeting a long-term leverage range of $6 billion to $8 billion.
CEO Travis Stice described Double Eagle as “the most attractive asset remaining in the Midland Basin,” highlighting the acquisition’s strategic fit with Diamondback’s existing operations. The newly acquired assets, with an estimated production run rate of 27,000 barrels of oil per day, will enhance Diamondback’s drilling inventory and increase operational efficiencies through infrastructure synergies and extended lateral drilling opportunities.
Market reaction to the announcement was positive, with Diamondback’s stock rising over 1% in pre-market trading. Investors appear to support the company’s measured approach to growth, which balances strategic acquisitions with financial prudence.
Deal Summary
- Transaction Value: $4.08 billion (cash and stock)
- Acquired Acreage: ~40,000 net acres in the Midland Basin
- Production Impact: Estimated 27,000 barrels per day (69% oil)
- Financing: 6.9 million shares and $3 billion in cash
- Debt Reduction Plan: $1.5 billion in non-core asset sales
- Expected Closing: April 1, 2025, subject to regulatory approvals
By securing one of the last major available assets in the Midland Basin, Diamondback Energy continues to solidify its role as a key player in the evolving landscape of U.S. shale production. The deal reinforces the company’s commitment to disciplined growth, operational efficiency, and shareholder value in an industry facing increasing economic and geopolitical uncertainty.
