Diamondback Energy close to buying Endeavor in $25bn US oil deal

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Diamondback Energy is closing in on a deal to buy Endeavor Energy Resources for around $25bn, according to people familiar with the matter, beating ConocoPhilips in a race for one of America’s most sought-after private oil producers.

The acquisition, which could be announced as soon as Monday, would transform Midland-based Diamondback into one of the biggest players in the sprawling Permian Basin of Texas and New Mexico, the biggest US oilfield.

Diamondback is putting the finishing touches to a deal, according to the people, after weeks of vying with Conoco to snap up Endeavor, owned by wildcat billionaire Autry Stephens.

Beating Conoco, which has a market capitalisation of around $132bn, would be a big win for Diamondback, which is valued at just $27bn, after it lost out to another bigger rival Occidental Petroleum in its attempt to buy CrownRock last year.

Occidental, which is backed by Warren Buffett, announced a $12bn deal for CrownRock — another sought-after private producer — in December.

Diamondback and Endeavor did not respond to requests for a response, while Conoco declined to comment. The advanced talks were first reported by the Wall Street Journal on Sunday.

The deal would be the latest in a flurry of large-scale merger and acquisition activity in the US shale patch as companies look to snap up the best remaining drilling acreage.

ExxonMobil announced in October a $60bn deal to buy Pioneer Natural Resources, the biggest player in the Permian. That was followed shortly afterwards by Chevron unveiling a $53bn acquisition of Hess, which has assets in North Dakota’s Bakken shale and a stake in the biggest oil find of the past decade, off the coast of Guyana in South America.

Last month, Chesapeake Energy agreed to buy Southwestern Energy for $7.4bn to create the country’s biggest natural gas producer.

Endeavor was set up by…