Diamondback Energy: Permian's Last Man Standing

Summary

• As the largest remaining Permian pure-play, we view Diamondback's asset base as highly attractive with per barrel costs at the low end of US E&Ps and a leading reserve life.
• The acquisition of Endeavor should further build on these strengths, extending <$40 inventory by ~50% and yielding up to $550MM in annual synergies.
• On our forecasts the deal will be ~4% FCF/sh accretive in 2025 with accretion rising to ~10% by 2028 as synergies on capex feed through.
• We view Diamondback as a key long in the space alongside EOG and initiate shares at Overweight with a PT of $220/sh (~13% upside).

sasacvetkovic33

Diamondback Energy (NASDAQ:FANG) emerged from the ashes of the recent consolidation in the Permian as the largest remaining pure-play, offering both 1) high quality Tier 1 acreage and 2) a durable and liquids-rich production runway. Driven by its best-in-class production footprint, our

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