Diamondback Energy announced the acquisition of Endeavor Energy Resources, a Texas-based oil and gas producer, in a deal worth $26 billion in cash and stock. The combined entity will become one of the largest oil and gas producers in the fast-growing Permian Basin in the US.

Diamondback Energy, which went public in 2012, has seen rapid growth in its fracking business, and its oil production has increased nearly 50-fold over the past decade to more than 260,000 barrels of oil per day. The agreement to acquire Endeavor includes approximately 117.3 million shares of Diamondback common stock and $8 billion in cash. Upon completion of the transaction, the combined company is expected to produce 816,000 barrels of oil equivalent per day and achieve annual synergies of $550 million.

The acquisition reflects a broader trend in the Permian Basin where producers are looking to acquire core acreage to increase production levels in a time of higher oil prices, leading to consolidation to achieve greater efficiency and scale. Last year saw Exxon Mobil's acquisition of Pioneer Natural Resources for nearly $60 billion, Chevron's takeover of Hess for $53 billion, and Occidental Petroleum's agreement to acquire CrownRock for $10.8 billion.