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Diamondback Energy Inc. is making a bold move in the Permian Basin, announcing Tuesday a cash-and-stock acquisition of Midland Basin assets from Double Eagle IV Midco LLC. The transaction, valued at billions, underscores Diamondback’s aggressive expansion strategy as it secures some of the last prime drilling locations in the region.

The Deal: A High-Stakes Play in Oil & Gas

The agreement involves a $3 billion cash payment along with 6.9 million shares of Diamondback's common stock, according to a company statement. With this purchase, Diamondback cements its position as a major force in the Midland Basin, acquiring roughly 40,000 net acres and 44 additional gross upside locations in emerging zones.

"Double Eagle is the most attractive asset remaining in the Midland Basin," said Diamondback CEO and Chairman Travis Stice. "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."

Strategic Gains: Expanding Diamondback’s Core Holdings

The deal also includes a fast-tracked development plan for a portion of Diamondback’s non-core southern Midland Basin acreage. This move is expected to unlock additional asset value by accelerating production from previously lower-priority sites.

"We are excited to announce our agreement with Diamondback," said Double Eagle Co-CEOs Cody Campbell and John Sellers. "We believe our 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."

How Diamondback Plans to Fund the Deal

Diamondback intends to finance the cash portion of the purchase through a combination of:

• Cash on hand
• Borrowings under its credit facility
• Proceeds from term loans and senior notes offerings

With the expected closing date set for April 1, Diamondback is moving swiftly to integrate these assets into its portfolio.

Legal Teams Behind the Mega Transaction

The deal is backed by powerhouse legal advisors on both sides:

Kirkland & Ellis LLP (Advising Diamondback)

• Corporate: Chris Heasley, Jarrod Gamble, Sean Wheeler, Debbie Yee, Camille Meissner
• Tax: David Wheat, Joe Tobias
• Debt Finance: Rachael Lichman, Layton Bell
• Capital Markets: Michael Rigdon, Billy Vranish
• Antitrust & Competition: Chuck Boyars, Matthew Wheatley
• Environmental Transactions: Jonathan Kidwell, Jennifer Cornejo

Vinson & Elkins LLP (Advising Double Eagle)

• Lead Partners: Bryan Loocke, Matt Strock, Mike Marek
• Corporate: Danielle Patterson, Jackson O'Maley
• Employment: Becky Baker
• Executive Compensation & Benefits: David D'Alessandro
• Tax: Megan James, David Peck
• Litigation: Evan Miller, Hill Wellford
• Finance: Tzvi Werzberger

What’s Next for the Midland Basin?

With Diamondback securing what it calls the "most attractive asset remaining" in the Midland Basin, the deal could set off a chain reaction in the oil and gas sector. As competition tightens and available prime acreage dwindles, industry giants may look to similar high-stakes acquisitions to maintain their foothold in the Permian.

For now, Diamondback has solidified its claim, and all eyes will be on how it maximizes the potential of its newly acquired assets.