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  • 1440 Daily Digest

Permian Rivals to Merge

Oil producer Diamondback Energy announced yesterday it will acquire Endeavor Energy Resources in a $26B cash-and-stock deal expected by the end of the year. The merger, which creates the third largest oil producer in the shale-rich Permian Basin, follows similar acquisitions from energy giants Chevron and ExxonMobil last year.

The 86,000-square-mile basin straddling West Texas and southeast New Mexico is the largest oil reserve in the US, with an estimated 46 billion barrels of oil equivalent (see overview). Although conventional drilling since the 1920s had mostly exhausted easy-to-access oil in the region, recent developments in hydraulic fracturing and horizontal drilling in the basin (how it works) have helped make the US the world's top oil producer since 2018. The Permian derives its name from the geologic period during which its hydrocarbon-rich sediments were deposited (roughly 300 million years ago). 

The gush of acquisitions comes amid predictions global oil demand will peak by 2030 as the adoption of renewable energy accelerates.

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