Diamondback, Double Eagle deal details
The agreement calls for Diamondback to acquire Double Eagle IV's core Midland basin assets including 407 horizontal locations (342 net) across 40,000 net acres of largely undeveloped acreage, with acreage contiguity allowing for more extended laterals, TD Cowen analyst said.
In its release Feb. 18, Diamondback noted estimated run-rate production from the assets of about 27,000 b/d (69% oil) and that inventory additions lie predominantly within well-delineated Middle Spraberry through Wolfcamp B zones.
Adding to the deal details, TD Cowen analysts said the transaction “appears to exclude developed acreage in Reagan County based off of production figures and shared acreage maps."
As part of the acquisition agreement, Diamondback said it also agreed with Double Eagle to accelerate development on a portion of Diamondback’s non-core southern Midland basin acreage.
Going forward, Diamondback noted an anticipated $200 million capital expenditure in 2025 at current Midland basin well costs of $555-605/ft with the addition of one additional rig running versus Diamondback base case.
To accelerate debt reduction following the deal, Diamondback said it plans to divest at least $1.5 billion of non-core assets with a plan to reduce net debt to $10 billion, and long term, maintain leverage of $6-8 billion.
EIR’s Dittmar said the operator “would likely look to its Delaware basin assets for sales opportunities, further concentrating its focus on the Midland basin.”
The deal is expected to close on Apr. 1, 2025, subject to customary closing conditions and regulatory approval.
