Diamondback Energy Inc. is merging with privately held Endeavor Energy Resources LP to create a Permian Basin juggernaut in a $26 billion cash and stock transaction, the companies said Monday.

Upon joining forces, the two Midland, TX-based independents would boast about 830,000 net acres and 816,000 boe/d of combined net production.

The merger, expected to close in the fourth quarter, would see existing Diamondback shareholders own 60.5% of the combined company, while Endeavor equity holders would own about 39.5%.

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“This is a combination of two strong, established companies merging to create a ‘must own’ North American independent oil...