Both Endeavor Energy Resources and Diamondback Energy are significant participants in the expanding Permian Basin.

The latest in a string of mergers and acquisitions in the US energy sector, two major Texas oil producers are teaming up in a $26 billion deal.

Major participants in the rapidly expanding Permian Basin oil industry, which spans both Texas and New Mexico, Diamondback Energy and Endeavor Energy Resources announced on Monday that they will unite in a cash-and-stock transaction in which Diamondback’s shareholders would own around 60% of the merged business.

The Permian Basin was originally thought to be a worn-out area. However, in the last ten or so years, advancements in technology have made its oil- and gas-rich shale resources more accessible for development, particularly with the introduction of hydraulically fractured horizontal wells, or fracking. The oil and gas field in the basin has become the most productive in the country.

“With this combination, Diamondback not only gets bigger, it gets better,” Travis Stice, the company’s chief executive, said in a statement.

Founded in 2007 and listed on the stock exchange since 2012, Diamondback Energy recorded $9.6 billion in revenue, mostly from oil sales, and over $4 billion in profit in its most recent fiscal year. It is valued at roughly $27 billion on the market.

“Diamondback was built through an acquire-and-exploit strategy,” Mr. Stice wrote in a letter to shareholders in November. He added that being a “low-cost operator” had been the company’s strength, and that “we expect Diamondback to remain a consolidator in the future.”

The inception of Endeavor began in 1979 when Autry Stephens, a wanderer, dug his first well in West Texas. In 2000, he renamed his company Endeavor, and it has since expanded to become one of the nation’s biggest privately held companies. However, Mr. Stephens, whose estimated net worth by Bloomberg is about $15 billion, is currently 85 years old, and the present consolidation wave makes now a favorable moment to sell.

“As we look toward the future, we are confident joining with Diamondback is a transformational opportunity for us,” Mr. Stephens said in a statement.

The oil and gas business has been engulfed in a deal frenzy as corporations strive to merge, even though experts believe that peak oil production will occur in the near future due to the global shift away from fossil fuels.

Last October, a slew of significant agreements was revealed one after the other. With its announcement in October that it would acquire Pioneer Natural Resources for $59.5 billion, Exxon Mobil established itself as the biggest participant in the Permian. Later that month, Hess’s most valuable assets were located overseas, but Chevron, the second-largest oil corporation in the United States, announced it would buy the company for $53 billion.

When Occidental Petroleum outbid Chevron to acquire Anadarko Petroleum for over $40 billion in 2019, it was making a bold move in the Permian. Occidental stated last December that it will acquire the privately held oil producer in the area, CrownRock, for a sum of $12 billion. 94,000 acres were acquired, of which 1,700 were in underdeveloped areas, according to Occidental.

Environmentalists are particularly concerned about the Permian basin because of the fracking boom’s effects on methane emissions and the depletion of water resources.