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Diamondback Energy, Inc and Endeavor Energy Resources, L.P. merge

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In a major development, Diamondback Energy, Inc. and Endeavor Energy Resources, L.P. have announced their merger in a definitive agreement valued at approximately $26 billion, including Endeavor’s net debt. This merger will create a leading independent operator in the Permian region.

Under the terms of the agreement, the transaction consideration will comprise approximately 117.3 million shares of Diamondback common stock and $8 billion in cash, subject to customary adjustments. The cash portion of the consideration is expected to be funded through a combination of cash on hand, borrowings, and proceeds from term loans and senior notes offerings. After the merger, Diamondback’s existing stockholders are anticipated to own approximately 60.5 percent of the combined company, while Endeavor’s equity holders will own approximately 39.5 percent.

The merger has received unanimous approval from the Board of Directors of Diamondback and has also obtained all necessary approvals from Endeavor. The combined company will have a robust inventory with industry-leading depth and quality, resulting in strong cash flow generation and the lowest cost structure in the industry. This positions the company as an attractive investment opportunity for stockholders.

Travis Stice, Chairman and CEO of Diamondback, expressed his excitement about the merger, highlighting the strategic and financial benefits it brings. He stated that the combination meets all the criteria for a successful merger, with sound industrial logic, tangible synergies, improved capital allocation, and significant financial accretion. Stice emphasized that Diamondback will not only grow in size but also in quality through this merger.

Autry C. Stephens, Founder and Chairman of the Board of Endeavor, expressed gratitude to the Endeavor team and expressed confidence in the value creation potential of the merger. Lance Robertson, President and CEO of Endeavor, commended the efforts of the Endeavor team and recognized Diamondback’s recognition of their achievements.

The merger will result in a pro forma scale of approximately 838,000 net acres and 816 MBOE/d of net production. The companies anticipate annual synergies of $550 million, representing over $3.0 billion in NPV10 over the next decade. The combined company will have a strong balance sheet and advance its environmental, social, and governance profile.

The merger is expected to close in the fourth quarter of 2024, subject to customary closing conditions and approval by Diamondback’s stockholders. Diamondback’s financial advisors are Jefferies LLC, while Citi is serving as the M&A and Capital Markets advisor. Endeavor’s financial advisor is J.P. Morgan Securities LLC, and Goldman Sachs & Co. LLC provided corporate advisory services. Legal advisors for Diamondback are Wachtell, Lipton, Rosen & Katz, and for Endeavor are Paul, Weiss, Rifkind, Wharton & Garrison LLP and Vinson & Elkins LLP.

A conference call and webcast will be held on February 12, 2024, to discuss the transaction in detail. Further information can be found on Diamondback’s website under the “Investor Relations” section.

For more information visit www.endeavorenergylp.com