Diamondback Nears Deal Worth About $5 Billion to Buy Permian Drilling Assets
Key Facts
The Financial Times reported, citing people familiar with the matter, that Diamondback Energy is nearing an agreement worth about $5 billion to buy a drilling portfolio from Double Eagle, in a move that would expand its presence in the Permian Basin. Reuters carried the report on November 15, 2026, but said it could not immediately verify it. The deal targets specific assets, not an acquisition of all of Double Eagle. Diamondback, Double Eagle and private equity firm EnCap Investments did not immediately respond to requests for comment outside regular business hours. The report said the structure and details of the deal were still being arranged ahead of a possible announcement.
The targeted asset is Double Eagle V, backed by EnCap Investments, according to the report. That connection highlights the private equity investor’s role in the portfolio being offered for sale, while the proposed deal focuses on drilling assets in the Permian Basin. The report valued the consideration at about $5 billion, without providing details on the acreage or the number of drilling sites in the current portfolio. None of the parties has yet announced official details on the assets or final terms. Reuters cited the newspaper’s report as saying the consideration would combine cash and stock.
The report said the deal could be announced as early as the start of the following week and that the consideration would include cash and stock. That timing remains tentative, as Diamondback, Double Eagle and EnCap have made no official announcement in the information available. The parties have also not confirmed the terms or final value of the consideration. Reuters said the three companies did not immediately respond to comment requests sent outside regular business hours. The lack of official confirmation leaves the deal’s details and timing subject to any subsequent announcement by the parties.
The talks follow previous transactions by Diamondback involving Double Eagle assets. In February 2025, the company bought certain Double Eagle units for $4.08 billion in cash and stock, according to a Reuters report. On February 18 that year, Diamondback announced an agreement to buy subsidiaries of Double Eagle IV, for consideration including about 6.9 million of its common shares and $3 billion in cash, subject to customary adjustments. The company later disclosed that it completed the Double Eagle acquisition on April 1, 2025. That deal included about 67,700 gross acres, of which 40,000 were net acres, and about 407 gross horizontal drilling locations, according to the company’s third-quarter 2026 filing.
Diamondback has expanded in the Permian through other major deals, including an agreement in 2024 worth $26 billion to buy rival Endeavor Energy Partners. Reuters said the deal made Diamondback the region’s third-largest producer. The proposed Double Eagle deal reflects the company’s continued addition of assets in the basin, while differing from the previous transaction in that the current report concerns a drilling portfolio from Double Eagle V. The current report did not specify the acreage or production associated with the targeted portfolio. The available comparison with previous deals is therefore limited to their values, consideration structures and the assets for which the company disclosed details.
The talks coincided with another Diamondback move involving infrastructure in the Midland Basin. On November 10, 2026, the company said its operations require reliable transportation of nearly 2 million barrels of water a day and described the Deep Blue system as essential to its operations. Diamondback had announced an agreement with KKR to acquire Deep Blue and expected to complete it in the fourth quarter of 2026, subject to regulatory approvals and customary closing conditions. That is a separate deal from the drilling portfolio cited in the Financial Times report. Disclosures show the company’s interest in basin assets extends to drilling and the water transportation needed to operate its business.
On operating and financial performance, Diamondback said on November 2 that its average oil production was 525,000 barrels a day in the third quarter of 2026, while equivalent production reached 1.034 million barrels a day. Net cash from operating activities was about $2.6 billion, and free cash flow was $2.1 billion in the same quarter. The company also reported standalone liquidity of $3.548 billion on September 30, 2026, comprising $548 million in cash and $3 billion available under its credit facility. Diamondback shares, which trade under the ticker FANG, closed at $184.93 on November 13, 2026. The potential deal, according to the report, is awaiting an announcement that could come early the following week.