Diamondback Energy, Inc. Announces Midland Basin Acquisition
Diamondback Energy (NASDAQ: FANG) has announced a definitive agreement to acquire subsidiaries of Double Eagle IV Midco for approximately 6.9 million shares of common stock and $3 billion in cash. The acquisition includes approximately 40,000 net acres in the Midland Basin with estimated production of 27 MBo/d.
The transaction, valued at 5.2x 2025 EBITDA, includes 407 gross horizontal locations with average lateral length exceeding 11,000 feet. Diamondback commits to selling at least $1.5 billion of non-core assets to reduce debt, targeting net debt reduction to $10 billion. The company expects to close the deal by April 1, 2025.
The acquisition is expected to enhance 2026 Free Cash Flow per share by over 5% and be immediately accretive to key financial metrics. The deal will be funded through cash on hand, credit facility borrowings, and potential term loans and senior notes offerings.
Diamondback Energy (NASDAQ: FANG) ha annunciato un accordo definitivo per acquisire le filiali di Double Eagle IV Midco per circa 6,9 milioni di azioni ordinarie e 3 miliardi di dollari in contante. L'acquisizione comprende circa 40.000 acri netti nel Midland Basin con una produzione stimata di 27 MBo/d.
La transazione, valutata 5,2 volte l'EBITDA del 2025, include 407 posizioni orizzontali lorde con una lunghezza laterale media superiore a 11.000 piedi. Diamondback si impegna a vendere almeno 1,5 miliardi di dollari di attivi non core per ridurre il debito, puntando a una riduzione del debito netto a 10 miliardi di dollari. L'azienda prevede di chiudere l'affare entro il 1° aprile 2025.
L'acquisizione dovrebbe migliorare il Free Cash Flow per azione nel 2026 di oltre il 5% e essere immediatamente accretiva per i principali indicatori finanziari. L'affare sarà finanziato attraverso liquidità disponibile, prestiti da linee di credito e potenziali prestiti a termine e offerte di note senior.
Diamondback Energy (NASDAQ: FANG) ha anunciado un acuerdo definitivo para adquirir las subsidiarias de Double Eagle IV Midco por aproximadamente 6.9 millones de acciones ordinarias y 3 mil millones de dólares en efectivo. La adquisición incluye aproximadamente 40,000 acres netos en el Midland Basin con una producción estimada de 27 MBo/d.
La transacción, valorada en 5.2 veces el EBITDA de 2025, incluye 407 ubicaciones horizontales brutas con una longitud lateral promedio superior a 11,000 pies. Diamondback se compromete a vender al menos 1.5 mil millones de dólares en activos no esenciales para reducir la deuda, con el objetivo de reducir la deuda neta a 10 mil millones de dólares. La compañía espera cerrar el trato antes del 1 de abril de 2025.
Se espera que la adquisición mejore el flujo de efectivo libre por acción en 2026 en más del 5% y sea inmediatamente accretiva para los principales indicadores financieros. El acuerdo se financiará a través de efectivo disponible, préstamos de línea de crédito y posibles préstamos a plazo y ofertas de notas senior.
다이아몬드백 에너지 (NASDAQ: FANG)는 더블 이글 IV 미드코의 자회사를 약 690만 주의 보통주와 30억 달러 현금으로 인수하기 위한 확정 계약을 발표했습니다. 이번 인수에는 미들랜드 분지에서 약 40,000 에이커의 순면적이 포함되어 있으며, 추정 생산량은 27 MBo/d입니다.
2025년 EBITDA의 5.2배로 평가된 이 거래에는 평균 11,000피트를 초과하는 수평 위치 407개가 포함됩니다. 다이아몬드백은 부채를 줄이기 위해 최소 15억 달러의 비핵심 자산을 판매할 것을 약속하며, 순부채를 100억 달러로 줄이는 것을 목표로 하고 있습니다. 회사는 2025년 4월 1일까지 거래를 마무리할 것으로 예상하고 있습니다.
이번 인수는 2026년 주당 자유 현금 흐름을 5% 이상 개선할 것으로 예상되며, 주요 재무 지표에 즉각적인 기여를 할 것입니다. 거래는 현금 보유, 신용 시설 대출 및 잠재적인 장기 대출 및 선순위 채권 발행을 통해 자금이 조달될 것입니다.
Diamondback Energy (NASDAQ: FANG) a annoncé un accord définitif pour acquérir des filiales de Double Eagle IV Midco pour environ 6,9 millions d'actions ordinaires et 3 milliards de dollars en espèces. L'acquisition comprend environ 40 000 acres nets dans le Midland Basin avec une production estimée à 27 MBo/j.
La transaction, évaluée à 5,2 fois l'EBITDA 2025, comprend 407 emplacements horizontaux bruts avec une longueur latérale moyenne dépassant 11 000 pieds. Diamondback s'engage à vendre au moins 1,5 milliard de dollars d'actifs non essentiels pour réduire sa dette, visant une réduction de la dette nette à 10 milliards de dollars. La société prévoit de finaliser l'accord d'ici le 1er avril 2025.
L'acquisition devrait améliorer le flux de trésorerie disponible par action en 2026 de plus de 5 % et être immédiatement bénéfique pour les principaux indicateurs financiers. Le financement de l'accord sera assuré par des liquidités disponibles, des emprunts de lignes de crédit et des prêts à terme potentiels ainsi que des offres de billets de premier rang.
Diamondback Energy (NASDAQ: FANG) hat eine endgültige Vereinbarung zur Übernahme der Tochtergesellschaften von Double Eagle IV Midco für etwa 6,9 Millionen Aktien und 3 Milliarden Dollar in bar angekündigt. Die Übernahme umfasst etwa 40.000 Netto-Acres im Midland Basin mit einer geschätzten Produktion von 27 MBo/d.
Die Transaktion, die mit dem 5,2-fachen des EBITDA 2025 bewertet wird, umfasst 407 Brutto-Horizontale Standorte mit einer durchschnittlichen lateralen Länge von über 11.000 Fuß. Diamondback verpflichtet sich, mindestens 1,5 Milliarden Dollar an nicht zum Kerngeschäft gehörenden Vermögenswerten zu verkaufen, um die Schulden zu reduzieren, mit dem Ziel, die Nettoverschuldung auf 10 Milliarden Dollar zu senken. Das Unternehmen plant, den Deal bis zum 1. April 2025 abzuschließen.
Die Übernahme wird voraussichtlich den Free Cash Flow pro Aktie im Jahr 2026 um über 5% steigern und sofort positiv zu den wichtigsten finanziellen Kennzahlen beitragen. Die Finanzierung des Deals erfolgt durch verfügbare Liquidität, Kreditlinien und potenzielle Terminkredite sowie Angebote von vorrangigen Anleihen.
- Acquisition adds 40,000 net acres in core Midland Basin with 27 MBo/d production
- Expected 5%+ enhancement to 2026 Free Cash Flow per share
- Immediately accretive to Cash Flow per share and NAV
- 407 high-quality drilling locations with 11,000'+ lateral lengths
- Significant operational synergies through lateral length extensions
- Increases leverage through $3 billion cash payment
- Requires $1.5 billion non-core asset sales for debt reduction
- Additional $200 million capital expenditure needed in 2025
Insights
This strategic acquisition significantly enhances Diamondback's position in the Midland Basin through a well-structured
The financial structure merits careful analysis: The 6.9 million share issuance represents relatively modest dilution while maintaining financial flexibility through a mixed funding approach. The 5.2x 2025 EBITDA multiple aligns with premium Permian asset valuations, particularly considering the largely undeveloped nature (
Three key value drivers stand out:
- Immediate inventory enhancement with 342 net primary locations that compete for capital allocation
- Operational synergies through lateral length extensions and infrastructure optimization
- Accelerated development potential of existing southern Midland Basin acreage
The commitment to divest
The anticipated
MIDLAND, Texas, Feb. 18, 2025 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback” or “the Company”) today announced that it has entered into a definitive purchase agreement to acquire certain subsidiaries of Double Eagle IV Midco, LLC (“Double Eagle”) in exchange for approximately 6.9 million shares of Diamondback common stock and
As part of this agreement, Diamondback and Double Eagle have also agreed to accelerate development on a portion of Diamondback’s non-core southern Midland Basin acreage. This acceleration is expected to bring forward Net Asset Value (“NAV”) to Diamondback by developing Diamondback’s lower quality acreage at a faster pace than current expectations. As a result, Diamondback expects significant Free Cash Flow growth in 2026 and beyond with minimal capital deployment through this accelerated development plan.
Diamondback is also committing today to sell at least
“Double Eagle is the most attractive asset remaining in the Midland Basin,” stated Travis Stice, Chairman and Chief Executive Officer of Diamondback. “With 407 locations adjacent to our core position, this largely undeveloped asset adds high-quality inventory that immediately competes for capital. Additionally, we see value uplift to our existing inventory as acreage overlap allows for meaningful lateral length extensions and infrastructure synergies. We look forward to seamlessly implementing our industry leading cost and operational structure on this differentiated asset.”
Mr. Stice continued, “The Permian Basin continues to consolidate rapidly. We have worked tirelessly over the last thirteen years to position Diamondback to have the longest duration of high quality, low-breakeven inventory; a position we are solidifying with today’s announcement. While we are adding a small amount of leverage to complete this trade, we are confident that we can quickly reduce debt both naturally through our consistent and growing Free Cash Flow and through our commitment to sell at least
Cody Campbell and John Sellers, Co-Chief Executive Officers of Double Eagle, commented, “We are excited to announce our agreement with Diamondback. We believe our team has built a truly standout asset that further increases Diamondback’s high-quality inventory. It was important to us that we maintain the stewardship of this asset going forward not only with a world-class Midland operator but also a group that shares our core values and understands the importance of community impact in West Texas.”
Asset Highlights: Consolidated Scale in the Midland Basin
- Approximately 40,000 net acres in the core of the Midland Basin
- Estimated run-rate production of approximately 27 MBo/d (
69% oil) $200 million of capital expenditures anticipated in 2025 at current Midland Basin well costs of$555 t o$605 per foot- Extends pro forma inventory life in the core of the Midland Basin
68% of the asset is undeveloped with 407 estimated gross (342 net) horizontal locations in primary development targets with an average lateral length of approximately >11,000’- 44 gross upside locations primarily located in emerging zones
Transaction Highlights
- Valued at approximately 5.2x 2025 EBITDA
- Enhances expected pro forma 2026 Free Cash Flow per share by
5% + - Immediately accretive to all relevant financial metrics including Cash Flow per share, Free Cash Flow per share and NAV per share
Timing and Approvals
Diamondback expects the transaction to close on April 1, 2025, subject to the satisfaction of customary closing conditions and regulatory approval.
Advisors
TPH&Co, the energy business of Perella Weinberg Partners, is serving as financial advisor to Diamondback. Kirkland & Ellis LLP is acting as legal advisor to Diamondback.
RBC Capital Markets, Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are acting as financial advisors to Double Eagle. Vinson & Elkins LLP is acting as legal advisor to Double Eagle.
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.
Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, which involve risks, uncertainties, and assumptions. All statements, other than statements of historical fact, including statements regarding Diamondback’s: future performance; business strategy; future operations (including drilling plans and capital plans); estimates and projections of production, revenues, losses, costs, expenses, returns, cash flow, and financial position; reserve estimates and its ability to replace or increase reserves; anticipated benefits or other effects of strategic transactions (including the pending drop down transaction with Viper Energy, Inc., the Double Eagle Acquisition and other acquisitions or divestitures); and plans and objectives of management (including plans for future cash flow from operations) are forward-looking statements. When used in this news release, the words “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “model,” “outlook,” “plan,” “positioned,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions (including the negative of such terms) as they relate to Diamondback are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Although Diamondback believes that the expectations and assumptions reflected in its forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond Diamondback’s control. Accordingly, forward-looking statements are not guarantees of future performance and Diamondback’s actual outcomes could differ materially from what Diamondback has expressed in its forward-looking statements.
Factors that could cause the outcomes to differ materially include (but are not limited to) the following: changes in supply and demand levels for oil, natural gas, and natural gas liquids, and the resulting impact on the price for those commodities; the impact of public health crises, including epidemic or pandemic diseases and any related company or government policies or actions; actions taken by the members of OPEC+ and Russia affecting the production and pricing of oil, as well as other domestic and global political, economic, or diplomatic developments, including any impact of the ongoing war in Ukraine and the Israel-Hamas war on the global energy markets and geopolitical stability; instability in the financial markets; trade wars; inflationary pressures; higher interest rates and their impact on the cost of capital; regional supply and demand factors, including delays, curtailment delays or interruptions of production, or governmental orders, rules or regulations that impose production limits; federal and state legislative and regulatory initiatives relating to hydraulic fracturing, including the effect of existing and future laws and governmental regulations; physical and transition risks relating to climate change; those risks described in Item 1A of Diamondback’s Annual Report on Form 10-K, filed with the SEC on February 22, 2024, and those risks disclosed in its subsequent filings on Forms 10-Q and 8-K, which can be obtained free of charge on the SEC’s website at http://www.sec.gov and Diamondback’s website at www.diamondbackenergy.com/investors.
In light of these factors, the events anticipated by Diamondback’s forward-looking statements may not occur at the time anticipated or at all. Moreover, Diamondback operates in a very competitive and rapidly changing environment and new risks emerge from time to time. Diamondback cannot predict all risks, nor can it assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those anticipated by any forward-looking statements it may make. Accordingly, you should not place undue reliance on any forward-looking statements. All forward-looking statements speak only as of the date of this news release or, if earlier, as of the date they were made. Diamondback does not intend to, and disclaims any obligation to, update or revise any forward-looking statements unless required by applicable law.
Diamondback Investor Contact:
Adam Lawlis
+1 432.221.7467
alawlis@diamondbackenergy.com
FAQ
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