$26 billion oil mega deal

They have no end the big deals among oil and especially those active in shale mining in the US. Now America’s Diamondback Energy has agreed to buy Endeavor Energy Resources, also based in Texas, for $26 billion in cash and stock. In this way, one of the biggest players in the production of black gold is created in the so-called Permian Basin located in Texas and New Mexico, USA, where huge amounts of oil are produced.

It is indicative that the combined value of the two companies that proceeded to the new megadeal even exceeds 50 billion dollars.

The deal was struck amid ongoing efforts by U.S. companies to increase market share and boost profits — while cutting costs so they can pay more dividends to shareholders and more easily buy back shares for the same reason.

It was also another move in a spate of mergers and acquisitions that have been taking place in recent months, as major players in the industry seek to bag big, profitable fields before their rivals do.

In addition, the high levels at which oil prices remain especially after the outbreak of the war in Ukraine, but also the ongoing conflicts between Israel and Hamas in the Gaza Strip, favor the companies in the sector, which have been enjoying mega profits for many months, giving them increased liquidity.

As part of these deals in October 2023 ExxonMobil paid $60 billion to acquire Pioneer Natural Resources, considered the largest shale oil player in the Permian Basin.

Then Chevron decided it didn’t want to sit idly by and paid $53 billion to acquire Hess, with assets in North Dakota’s Bakken shale field and interests in fields off the coast of Guyana in South America.

Also, Occidental Petroleum agreed to acquire CrownRock for $10.8 billion. Also just last month, Chesapeake Energy agreed to buy Southwestern Energy for $7.4 billion, with the goal of creating the largest natural gas producer in the US.

These developments show how much interest has grown in the production and export of fossil fuels and especially oil and natural gas from the US to other countries.

In recent years, the US has emerged as a leading power in oil production worldwide, having managed to produce on a daily basis quantities ranging from 12 to 13 million barrels. They may not be as heavily exported as Saudi Arabia, which produces around 10.5 million barrels per day, but it’s clear that the country is a superpower in this sector as well.

The US managed to further strengthen its position in production shares as well, reaching almost 15% globally compared to 13.2% now held by Saudi Arabia and 12.8% by Russia. In November 2023, the month for which the most recent figures are available from the US, the country reached 13.3 million barrels of oil per day.