Street View: Diamondback's $26 bln deal for Endeavor looks logical and attractive
12/02/2024 14:37
** Shale producer Diamondback Energy FANG.O says it would
buy the largest privately held oil and gas producer in the
Permian Basin, Endeavor Energy Partners, in a $26 bln
cash-and-stock deal
** The combined company to become the third-largest producer
in the top U.S. oilfield
** Shares of Diamondback gain 5.7% in early trading
DEAL CREATES A PERMIAN POWERHOUSE
** TD Cowen ("outperform") says the FANG is attractively
increasing scale by 76% and valuation seems fair at $31,000 per
acre and below recent deals for CrownRock and Pioneer Natural
Resources PXD.N
** Johnson Rice & Co ("buy") notes that Endeavor's asset
base in the Midland Basin has been envied and sought after by
all the big players in the basin, and FANG landing this deal is
a coup for the management team
** RBC Capital Markets ("outperform") says the deal is a
logical transaction, given the asset overlap and potential
synergies, and investors would reward it
** KeyBanc ("overweight") says merger could incentivize
Diamondback to divest non-core acreage in the Delaware Basin,
given it will no longer be critical to maintaining its
investor-grade debt ratings
(Reporting by Sourasis Bose in Bengaluru)
((Sourasis.bose@thomsonreuters.com))