According to reports on Sunday, an approximately $25 billion cash and stock merger between rival U.S. shale oil producers Diamondback Energy and Endeavour Energy Resources is almost complete, creating an oil and gas business valued at over $50 billion.

According to the people, Diamondback may make an announcement as soon as Monday that would give its shareholders control over half of the combined businesses, making it the biggest pure-play oil producer in the Permian shale area.

The largest privately held producer of oil and gas in the Permian basin, Endeavour Energy Partners, was reportedly investigating a sale in December, with a potential valuation of $25 billion to $30 billion.

A request for comment was not immediately answered by Endeavour or Diamondback.

In the Permian, the largest oilfield in the United States that spans both West Texas and New Mexico, the combined business would rank third in terms of production of both oil and gas. With regard to oil and gas volumes, it would lag behind Exxon Mobil and Chevron, both of which have recently made deals.

Chief investment officer of Pickering Energy Partners Dan Pickering stated, “In terms of the acreage overlap and fit, this is a layup.” According to him, the merged business would overtake Pioneer Natural Resources—which Exxon is buying—as the leading producer of only Permian oil.

In an attempt to secure future drilling inventory and output from the leading U.S. oilfield, permian producers are grouping together. The agreement will probably increase the pressure on the other businesses to merge in order to increase size and efficiencies, according to analysts. 

But according to Andrew Dittmar, a senior vice president at data analytics company Enverus, future transactions are unlikely to equal the magnitude of Permian shale acquisitions made in recent months. He disregarded any other offers for Endeavour.

According to Dittmar, Diamondback’s usage of cash and stock will enable the Stephens family, who founded Endeavour, to maintain a significant stake in the biggest oil company in Midland, Texas, the location of both businesses.

“Their (drilling) inventory is extremely high quality that will make the combined companies a very attractive investment on Wall Street. I imagine it will be well received by the market on Monday,” he said.

ConocoPhillips and other competitors were repelled by Diamondback, according to earlier reporting from the Wall Street Journal.

Nearly 45 years had passed since Texas oilman Stephens founded the business that would eventually become Endeavour, when the deal was made.

The 350,000 acres (1,416 square kilometres) that Endeavour operates on are located in the Midland region of the Permian Basin.

Stephens, a former appraisals engineer who rose to prominence on television documentaries like Black Gold, expanded Endeavour by buying his rivals’ abandoned land and successfully extracting gas and oil.

Stephens established and used his own fracking, construction, trucking, and other service companies to reduce his production expenses.

(Adapted from Bloomberg.com)