Diamondback, Endeavor to Merge

Diamondback and Endeavor have announced a definitive merger agreement. The merger, valued at approximately US$26 billion inclusive of Endeavor's net debt, is poised to create a leading independent operator in the Permian Basin.

Under the terms of the agreement, Diamondback and Endeavor will combine forces, with Diamondback issuing approximately 117.3 million shares of common stock and US$8 billion in cash, subject to customary adjustments. Upon completion, Diamondback's existing stockholders are expected to own roughly 60.5% of the combined entity, while Endeavor's equity holders are anticipated to hold approximately 39.5%.

Travis Stice, Chairman and CEO, Diamondback, touted the merger as the creation of a "must-own" North American independent oil company. He emphasized the combined company's industry-leading inventory depth and quality, poised to generate cash flow with the lowest cost structure in the sector. Stice highlighted the transaction's alignment with Diamondback's strategic objectives, emphasizing tangible synergies, improved capital allocation, and significant financial accretion.

The merger has received unanimous approval from both companies' boards of directors and is poised to position Diamondback as a premier Permian-focused company headquartered in Midland. Lance Robertson, President and CEO, Endeavor, expressed confidence in the transformative potential of the partnership, recognizing it as a testament to the dedication and hard work of Endeavor employees.

Key strategic and financial benefits of the merger include a combined scale of approximately 838,000 net acres and 816Mboe/d of net production, best-in-class inventory depth and quality, and substantial synergies totaling US$550 million annually. The transaction is expected to deliver substantial near and long-term financial accretion.

The transaction, expected to close in 4Q24, is subject to customary closing conditions and regulatory approvals. Jefferies LLC and Citi are serving as financial advisors to Diamondback, while J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are advising Endeavor. Wachtell, Lipton, Rosen & Katz and Paul, Weiss, Rifkind, Wharton & Garrison LLP are serving as legal advisors to Diamondback and Endeavor, respectively.