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Diamondback Energy is close to reaching a deal to buy Endeavor Energy Resources for about $25 billion, according to people familiar with the matter, beating ConocoPhilips in the race to become one of America’s most sought-after private oil producers.
The acquisition, which could be announced as early as Monday, would transform Midland-based Diamondback into one of the biggest players in the vast Permian Basin of Texas and New Mexico, the largest U.S. oil field.
Diamondback is putting the finishing touches on a deal, sources say, after weeks of feuding with Conoco to buy Endeavor, owned by billionaire wildcat Autry Stephens.
Beating Conoco, which has a market capitalization of around $132 billion, would be a big victory for Diamondback, which is valued at just $27 billion, after losing to another bigger rival, Occidental Petroleum, in its attempt CrownRock purchase last year.
Occidental, backed by Warren Buffett, announced a $12 billion deal in December for CrownRock – another sought-after private producer.
Diamondback, Endeavor and Conoco did not respond to requests for comment. The advanced talks were first reported by The Wall Street Journal on Sunday.
The deal would be the latest in a wave of large-scale mergers and acquisitions in the U.S. shale sector, as companies seek to snap up the best remaining drilling acreage.
ExxonMobil announced a $60 billion deal in October to buy Pioneer Natural Resources, the Permian’s largest player. This was followed shortly after by Chevron unveiling a $53 billion acquisition of Hess, which has assets in North Dakota’s Bakken shale and a stake in the largest oil discovery of the last decade, off the coast of Guyana in South America.
Last month, Chesapeake Energy agreed to buy Southwestern Energy for $7.4 billion to create the nation’s largest natural gas producer.
Endeavor was created by Stephens in 2000, following a company he had built from a solitary platform in 1979. Alongside CrownRock and Mewbourne Oil, it has become one of the major private operators in the country.
The company has been in the market intermittently over the years, but no potential buyer has ever offered enough to satisfy Stephens.
Like other private players, Endeavor has sharply increased production in recent years as its publicly traded rivals have curbed drilling under pressure from Wall Street to return cash to shareholders. It was producing about 400,000 barrels of oil equivalent per day late last year, more than many state-owned players.
The increase in production by private oil groups like Endeavor has helped propel American production to record levels. The country pumped 13.3 million barrels of oil per day in November, the latest month for which data is available from the Energy Information Administration, more than any other country in history.