Viper Energy, a subsidiary of Diamondback Energy, will buy mineral and royalty company Sitio Royalties Corp in an all-equity deal valued at around
$4.1 billion, including the target company’s debt.
The buyer will acquire Sitio’s net debt of approximately $1.1 billion as of March 31, 2025, the firms said on Tuesday.
Sitio is a pure-play mineral and royalty company that acquires quality oil and gas mineral and royalty interests in productive U.S. basins. Sitio has around 25,300 net royalty acres in the Permian Basin, as well as an additional about 9,000 net royalty acres in other major basins such as the DJ, Eagle Ford, and Williston basins.
The transaction has been unanimously approved by the Board of Directors of each company and has been approved by the written consent of Diamondback as Viper’s majority stockholder.
Stockholders holding an aggregate of approximately 48% of Sitio’s outstanding voting power, including its largest stockholder, Kimmeridge, have agreed to vote in favor of the transaction.
The deal, subject to customary regulatory approvals, is expected to close in the third quarter of 2025.
The acquisition will add substantial scale and inventory depth that will support the combined company’s durable production profile and free cash flow growth over the next decade, Viper Energy said.
“This combination creates a leader in size, scale, float, liquidity, and access to investment-grade capital in the highly fragmented minerals industry,” said Viper CEO Kaes van’t Hof.
After a record two years, the U.S. oil mergers and acquisition spree has cooled in recent weeks due to fewer high-quality targets, tighter capital, and weaker crude prices.
Diamondback, one of the largest Permian operators, said in a letter to investors last month that onshore crude oil production in the United States has peaked. Diamondback expects output to start declining later this year unless oil prices reverse course.
By Tsvetana Paraskova for Oilprice.com
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