Here’s an oil & gas deal so big, it would even raise eyebrows on the hit Paramount+ series “Landman.” 

Fort Worth-based Double Eagle, an independent oil and natural gas company, has announced the sale of its equity interest in certain subsidiaries to Midland’s Diamondback Energy (NASDAQ: FANG) for $3 billion in cash and 6.9 million shares of Diamondback common stock.

Said to be worth $4.08 billion, the deal includes around 40,000 net acres in the core of the Midland Basin and an estimated run-rate production of around 27,000 barrels per day (69% oil).

‘Most attractive asset remaining in the Midland basin’ 

“Double Eagle is the most attractive asset remaining in the Midland basin,” Travis Stice, chairman and CEO of Diamondback, said in a statement. “With 407 locations adjacent to our core position, this largely undeveloped asset adds high-quality inventory that immediately competes for capital. Additionally, we see value uplift to our existing inventory as acreage overlap allows for meaningful lateral length extensions and infrastructure synergies. We look forward to seamlessly implementing our industry leading cost and operational structure on this differentiated asset.”

“The Permian basin continues to consolidate rapidly,” Stice added. “We’ve worked tirelessly over the last 13 years to position Diamondback to have the longest duration of high quality, low-breakeven inventory; a position we are solidifying with today’s announcement.”

Double Eagle Co-CEOs Cody Campbell and John Sellers said their team “has built a truly standout asset that further increases Diamondback’s high-quality inventory.”

“It was important to us that we maintain the stewardship of this asset going forward not only with a world-class Midland operator but also a group that shares our core values and understands the importance of community impact in West Texas,” Campbell and Sellers added in a joint statement.

Other asset highlights of the deal include:

• $200 million of capital expenditures anticipated in 2025 at current Midland basin well costs of $555 to $605 per foot
• Extends pro forma inventory life in the core of the Midland basin
• 68% of the asset is undeveloped with 407 estimated gross (342 net) horizontal locations in primary development targets with an average lateral length of approximately >11,000’
• 44 gross upside locations primarily located in emerging zones

As part of the deal, Diamondback and Double Eagle said they’ve also agreed to accelerate development on a portion of Diamondback’s non-core southern Midland basin acreage.

“This acceleration is expected to bring forward Net Asset Value to Diamondback by developing Diamondback’s lower quality acreage at a faster pace than current expectations,” Diamondback said in a statement. “As a result, Diamondback expects significant Free Cash Flow growth in 2026 and beyond with minimal capital deployment through this accelerated development plan.”

Diamondback also said it plans to sell $1.5 billion of non-core assets to accelerate pro forma debt reduction “in order to maintain its strong balance sheet.”

Double Eagle was formed in 2022

Double Eagle IV Midco, LLC is an independent oil and natural gas company focused on development and production throughout the Permian Basin. It was formed in 2022 by the same management team that successfully led its predecessor companies, Double Eagle said, and launched with equity capital commitments from EnCap Investments L.P., Apollo Natural Resources, Elda River Capital, Double Eagle Management, and other strategic institutional investors.

EnCap Partner Kyle Kafka said the “high-quality asset base” is a natural fit with Diamondback, describing the Midland company as “the leading public operator in the Midland Basin.”

“We’re excited to be a significant shareholder going forward,” Kafka added in a statement.

The deal is slated to close on April 1, subject to customary closing conditions and regulatory approval.

Don’t miss what’s next. Subscribe to Dallas Innovates.

Track Dallas-Fort Worth’s business and innovation landscape with our curated news in your inbox Tuesday-Thursday.