Diamondback Energy Closes $26B Endeavor Acquisition

TL;DR

DBEK just bought Endeavor for $26B, massive Midland Basin play!

AI Summary

On April 18, 2024, Diamondback Energy, Inc. announced the closing of its acquisition of all of the outstanding common stock of Endeavor Energy Resources, LLC. The transaction was valued at approximately $26 billion, consisting of $11 billion in cash and 117.3 million shares of Diamondback common stock. This acquisition significantly expands Diamondback's operations in the Midland Basin.

Why It Matters

This massive acquisition consolidates significant acreage in the Midland Basin, positioning Diamondback Energy as a dominant player in the region and potentially impacting future production and market dynamics.

Risk Assessment

Risk Level: medium — The substantial cash and stock component of the deal, along with the integration of a large acquired company, introduces financial and operational risks.

Key Numbers

• $26.0B — Total Transaction Value (Represents the full cost of acquiring Endeavor Energy Resources.)
• $11.0B — Cash Component (The cash paid as part of the acquisition consideration.)
• 117.3M — Stock Component (The number of Diamondback shares issued to complete the acquisition.)

Key Players & Entities

• Diamondback Energy, Inc. (company) — Acquiring company
• Endeavor Energy Resources, LLC (company) — Acquired company
• $26 billion (dollar_amount) — Total transaction value
• $11 billion (dollar_amount) — Cash portion of the transaction
• 117.3 million (dollar_amount) — Shares of Diamondback common stock issued
• April 18, 2024 (date) — Closing date of the acquisition
• Midland Basin (location) — Primary operational area affected by the acquisition

FAQ

Key Financial Figures

• $0.01 — ich registered Common stock, par value $0.01 per share FANG The Nasdaq Stock Mar
• $850,000,000 — offering (the "Notes Offering") of (i) $850,000,000 aggregate principal amount of its 5.200
• $1,300,000,000 — otes due 2030 (the "2030 Notes"), (iii) $1,300,000,000 aggregate principal amount of its 5.400
• $1,500,000,000 — Notes due 2034 (the "2034 Notes"), (iv) $1,500,000,000 aggregate principal amount of its 5.750
• $1,000,000,000 — tes due 2054 (the "2054 Notes") and (v) $1,000,000,000 aggregate principal amount of its 5.900

Filing Documents

• ef20027000_8k.htm (8-K) — 57KB
• ef20027000_ex5-1.htm (EX-5.1) — 18KB
• ef20027000_ex4-2.htm (EX-4.2) — 494KB
• 0001140361-24-020511.txt ( ) — 810KB
• fang-20240418.xsd (EX-101.SCH) — 4KB
• fang-20240418_lab.xml (EX-101.LAB) — 21KB
• fang-20240418_pre.xml (EX-101.PRE) — 16KB
• ef20027000_8k_htm.xml (XML) — 4KB

01

Item 1.01. Entry into a Material Definitive Agreement. On April 18, 2024, Diamondback Energy, Inc. (the "Company" or "Diamondback") completed its previously announced underwritten public offering (the "Notes Offering") of (i) $850,000,000 aggregate principal amount of its 5.200% Senior Notes due 2027 (the "2027 Notes"), (ii) $850,000,000 aggregate principal amount of its 5.150% Senior Notes due 2030 (the "2030 Notes"), (iii) $1,300,000,000 aggregate principal amount of its 5.400% Senior Notes due 2034 (the "2034 Notes"), (iv) $1,500,000,000 aggregate principal amount of its 5.750% Senior Notes due 2054 (the "2054 Notes") and (v) $1,000,000,000 aggregate principal amount of its 5.900% Senior Notes due 2064 (the "2064 Notes" and, together with the 2027 Notes, the 2030 Notes, the 2034 Notes and the 2054 Notes, each a "series of Notes" and collectively, the "Notes"). The Notes have been registered under the Securities Act of 1933, as amended (the "Act"), pursuant to a registration statement on Form S-3 (No. 333-268495), filed with the Securities and Exchange Commission (the "SEC") and automatically effective on November 21, 2022 (the "Shelf Registration Statement"). The terms of the Notes are further described in the Company's prospectus supplement dated April 9, 2024, as filed with the SEC under Rule 424(b)(2) of the Act on April 11, 2024 (the "Prospectus"). On April 18, 2024, the Notes were issued pursuant to the Indenture (the "Base Indenture"), dated as of December 13, 2022, between the Company and Computershare Trust Company, National Association (the "Trustee"), as trustee, as supplemented by the Second Supplemental Indenture, dated as of April 18, 2024 (the "Second Supplemental Indenture" and, together with the Base Indenture, the "Indenture"), among the Company, as the issuer, Diamondback E&P LLC, as the subsidiary guarantor ("E&P"), and the Trustee, setting forth specific terms applicable to the Notes. Each series of Notes and E&P's guarantee thereof are t

03

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information set forth in Item 1.01 above with respect to the Notes is incorporated by reference into this Item 2.03.

01

Item 8.01. Other Events Legal Opinion Relating to the Notes In connection with closing of the Notes Offering, the Company is filing a legal opinion of Wachtell, Lipton, Rosen & Katz regarding the legality of the Notes issued in the Notes Offering, attached as Exhibit 5.1 to this Current Report on Form 8-K, to incorporate such opinion by reference into the Shelf Registration Statement.

01

Item 9.01.

Financial Statements and Exhibits

Financial Statements and Exhibits (d) Exhibits Exhibit Number Description 4.1 Indenture, dated as of December 13, 2022, between Diamondback Energy, Inc. and Computershare Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to the Form 8-K, File No. 001-35700, filed by the Company with the SEC on December 13, 2022). 4.2 Second Supplemental Indenture, dated as of April 18, 2024, by and among Diamondback Energy, Inc., Diamondback E&P LLC and Computershare Trust Company, National Association, as Trustee (including the form of the Notes). 5.1 Opinion of Wachtell, Lipton, Rosen & Katz. 23.1 Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 5.1 hereto). 104 Cover Page Interactive Data File (formatted as Inline XBRL).

Forward Looking Statements

Forward Looking Statements This Current Report on Form 8-K may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, which involve risks, uncertainties, and assumptions. All statements, other than statements of historical fact, including certain statements relating to the Notes Offering and the proposed business combination transaction between Diamondback and Endeavor; future performance; business strategy; future operations (including drilling plans and capital plans); estimates and projections of revenues, losses, costs, expenses, returns, cash flow, and financial position; reserve estimates and its ability to replace or increase reserves; anticipated benefits of strategic transactions (including acquisitions and divestitures), including the proposed transaction; the expected amount and timing of synergies from the proposed transaction; the anticipated timing of the proposed transaction; and plans and objectives of management (including plans for future cash flow from operations and for executing environmental strategies) are forward-looking statements. When used in this communication, the words "aim," "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "model," "outlook," "plan," "positioned," "potential," "predict," "project," "seek," "should," "target," "will," "would," and similar expressions (including the negative of such terms) are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Although Diamondback believes that the expectations and assumptions reflected in its forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond Diamondback's control. Accordingly, forward-looking statements are not guarantees of fut