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  • Diamondback Energy, Inc. and Endeavor Energy Resources, L.P. to Merge to Create a Premier Permian Independent Oil and Gas Company
    édité le 13/02/2024 - Plus de news de "Diamondback Energy" - Voir la fiche entreprise de "Diamondback Energy"


Diamondback Energy, Inc. and Endeavor Energy Resources, L.P. to Merge to Create a Premier Permian Independent Oil and Gas Company
Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback” or the “Company”) and Endeavor Energy Resources, L.P. (“Endeavor”), today announced that they have entered into a definitive merger agreement under which Diamondback and Endeavor will merge in a transaction valued at approximately $26 billion, inclusive of Endeavor’s net debt. The combination will create a premier Permian independent operator.

The transaction consideration will consist of approximately 117.3 million shares of Diamondback common stock and $8 billion of cash, subject to customary adjustments. The cash portion of the consideration is expected to be funded through a combination of cash on hand, borrowings under the Company’s credit facility and/or proceeds from term loans and senior notes offerings. As result of the transaction, the Company’s existing stockholders are expected to own approximately 60.5% of the combined company and Endeavor’s equity holders are expected to own approximately 39.5% of the combined company.

The transaction was unanimously approved by the Board of Directors of the Company and has all necessary Endeavor approvals.

“This is a combination of two strong, established companies merging to create a ‘must own’ North American independent oil company. The combined company’s inventory will have industry-leading depth and quality that will be converted into cash flow with the industry’s lowest cost structure, creating a differentiated value proposition for our stockholders,” stated Travis Stice, Chairman and Chief Executive Officer of Diamondback. “This combination meets all the required criteria for a successful combination: sound industrial logic with tangible synergies, improved combined capital allocation and significant near and long-term financial accretion. With this combination, Diamondback not only gets bigger, it gets better.”

Mr. Stice continued, “Over the past forty-five years, Mr. Stephens and his team at Endeavor have built the highest quality private oil company in the United States. Our companies share a similar culture and operating philosophy and are headquartered across the street from one another, which should allow for a seamless integration of our two teams. As a result, we look forward to continuing to deliver best-in-class results with a combined employee base headquartered in Midland, assuring Midland’s relevance in the global oil market for the next generation.”

“I am grateful to the Endeavor team and proud of what we have built since 1979,” said Autry C. Stephens, Founder and Chairman of the Board of Endeavor. “We believe Diamondback is the right partner for Endeavor, our employees, families and communities. Together we will create value for shareholders and our other stakeholders.”

“As we look toward the future, we are confident joining with Diamondback is a transformational opportunity for us,” said Lance Robertson, President and Chief Executive Officer of Endeavor. “Our success up to this point is attributable to the dedication and hard work of Endeavor employees, and today’s announcement is recognition by Diamondback of the significant efforts from our team over the past seven years, driving production growth, improving safety performance and building a more sustainable company. We look forward to working together to scale our combined business, unlock value for all of our stakeholders and ensure our new company is positioned for long-term success as we build the premier Permian-focused company in Midland.”

Strategic and Financial Benefits

  - Combined pro forma scale of approximately 838,000 net acres and 816 MBOE/d of net production
  - Best in-class inventory depth and quality with approximately 6,100 pro forma locations with break evens at <$40 WTI
  - Annual synergies of $550 million representing over $3.0 billion in NPV10 over the next decade
    - Capital and operating cost synergies: approximately $325 million
    - Capital allocation and land synergies: approximately $150 million
    - Financial and corporate cost synergies: approximately $75 million
  - Substantial near and long-term financial accretion with ~10% free cash flow per share accretion expected in 2025
  - Stock-weighted transaction solidifies investment grade balance sheet
  - Advances leading ESG profile

“This combination offers significant, tangible synergies that will accrue to the pro forma stockholder base,” stated Travis Stice. “Diamondback has proven itself to be a premier low-cost operator in the Permian Basin over the last twelve years, and this combination allows us to bring this cost structure to a larger asset and allocate capital to a stronger pro forma inventory position. We expect both teams will learn from each other and implement best practices to improve combined capital efficiency for years to come.”

2024 Diamondback Stand-alone Guidance and Base Dividend Increase

In conjunction with this announcement, Diamondback is releasing selected operating information for the fourth quarter of 2023 and providing initial production and capital guidance for 2024. Diamondback today also announced that the Company's Board of Directors will approve a 7% increase to its base dividend to $3.60 per share annually ($0.90 per share quarterly), effective for the fourth quarter of 2023.

  - Average fourth quarter 2023 production of 273.1 MBO/d (462.6 MBOE/d)
  - Fourth quarter 2023 cash capital expenditures of $649 million
  - On a stand-alone basis in 2024 Diamondback expects to generate oil production of 270 – 275 MBO/d (458 – 466 MBOE/d) with a total capital budget of approximately $2.3 - $2.55 billion
  - Beginning in the first quarter of 2024, Diamondback will reduce its return of capital commitment to at least 50% of free cash flow to stockholders from at least 75% of free cash flow previously

“Diamondback today released fourth quarter production that exceeded expectations and announced a 2024 capital and operating plan that prioritizes capital efficiency and free cash flow generation over growth,” stated Travis Stice. “The decision to reduce our return of capital to stockholders reflects our Board’s desire to increase financial flexibility and pay down debt added through this combination. Our near-term objective is to reduce pro forma net debt below $10 billion very quickly, ensuring balance sheet strength and best-in-class credit quality. Return of capital to stockholders will always remain a core tenet of our value proposition and capital allocation philosophy at Diamondback.”

2024 Endeavor Stand-alone Guidance

Endeavor is providing stand-alone 2024 capital and operating guidance while the two companies work to close the merger.

Expected 2024 oil production of 190 – 200 MBO/d (350 – 365 MBOE/d)
Total 2024 capital budget of approximately $2.5 - $2.6 billion
Full pro forma guidance will be released by Diamondback after closing of the transaction.

About Diamondback

Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. For more information, please visit www.diamondbackenergy.com.

About Endeavor

Endeavor is a privately-held exploration and production company. Headquartered near operational activity in Midland, Texas, Endeavor has more than 1,200 valued employees and is one of the largest private operators in the United States.

With more than 45 years of experience acquiring assets, the company is uniquely situated holding nearly 344,000 net acres in the Core 6 Midland Basin counties.


Origine : Communiqué Diamondback Energy

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