Diamondback Energy and its US-based oil and gas rival Endeavor Energy Resources are reportedly on the verge of signing a merger deal that values the combined entity at over $50bn.

The cash and stock deal involves Diamondback Energy acquiring Endeavor Energy for $25bn. An announcement regarding the deal is expected to be made as early as this week, reported Reuters, citing undisclosed sources.

Diamondback Energy’s shareholders will hold the majority stake in the combined entity, as per the sources.

Last month, it was reported by the news agency that Endeavor Energy was planning a sale of the company that could result in a valuation ranging between $25bn and $30bn.

Founded by oil tycoon Autry Stephens, the company is engaged in upstream activities in the Midland Basin of the Permian Basin.

Endeavor Energy’s operations are spread across nearly 350,000 net acres in the Midland Basin with a focus on the Martin, Howard, Midland, Glasscock, Upton, and Reagan counties. Its production is said to exceed 400,000 gross operated barrels of oil equivalent per day (Boe/d).

Diamondback Energy is a Texas-based oil and natural gas firm. The company is focused on acquiring, developing, exploring, and exploiting unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas.

Its operations are focused mainly on the horizontal exploitation of various intervals within the Wolfcamp, Spraberry and Bone Spring formations.

As per its Q3 2023 results, Diamondback Energy had an average production of 266.1 thousand barrels of oil per day (452.8 thousand barrels of oil equivalent per day).

The combination of Diamondback Energy and Endeavor Energy would result in the third-largest oil and gas producer in the Permian Basin after ExxonMobil and Chevron, reported Reuters.