US energy giants Diamondback and Endeavor in $76.7b merger talks

The news: US energy giants Diamondback Energy and Endeavor Energy are in talks to complete a merger worth more than USD50 billion ($76.7 billion), the Wall Street Journal reported.

The numbers: The stock-and-cash deal would value Endeavor at approximately USD25 billion, while Diamondback shareholders would own the majority of the combined company, according to people familiar with the matter. Diamondback has a market value of around USD27 billion.

Diamondback's crude production has grown 50-fold since the firm went public in 2012, reaching more than 260,000 barrels of oil per day. It's estimated that a merger with Endeavor would grow its acreage in the Permian Basin — the highest producing oil field in the US — and up production to more than 400,000 barrels per day.

The context: Diamondback reportedly fended off competition from rivals such as ConocoPhillips to secure the deal with Endeavor. Recent months have seen increased consolidation in the US energy sector, fuelled by higher oil prices and a rush to take prime acreage. In October last year Exxon Mobil acquired Pioneer for USD60 billion, and Chevron announced a USD53 billion deal for Hess, while Occidental Petroleum agreed to buy CrownRock for USD12 billion in December.