Wednesday, 19 February, 2025 / Edition 46

I hope our readers enjoyed celebrating Valentine’s Day. We had old friends come to visit us from another continent for the special occasion.

Now, let’s look into two recent energy newsbytes.

Shangyou Nie

Editor, Well Read

Diamondback to Acquire Double Eagle

Stock All/ Shutterstock.com

Yesterday, reports surfaced that Midland, Texas-based Diamondback Energy will acquire Fort Worth-based Double Eagle for $4.08 billion. The deal is anticipated to close 1 April, 2025.

The latest:

• The WSJ reported Diamondback agreed to acquire Double Eagle and its subsidiaries for $3 billion in cash and 6.9 million shares of common stock.

• Diamondback also announced that it will sell at least $1.5 billion of non-core assets to maintain a strong balance sheet.

About Diamondback:

• Diamondback is a Permian pure play company.

• It has a market cap of $46 billion and $12.7 billion net debt as of November 2024.

• Its share price is down 12 percent in past year, and down 5.9 percent YTD in 2025.

• Diamondback is producing about 470,000 barrels of oil per day from the Permian Basin.

• In 2024, Diamondback had a CapEx program of $2.9–$3.0 billion.

• In February 2024, Diamondback made one of the biggest M&A deals of the year, acquiring Endeavor Energy Resources for $26 billion. It reportedly fended off rivals including ConocoPhillips.

About Double Eagle:

• Double Eagle is a Fort Worth-based private company, established in 2022.

• Double Eagle is headed by two Texas Tech University alumni and co-CEOs Cody Campbell and John Sellers. The company was initially launched for real estate development.

• Campbell is a former NFL player for the Indianapolis Colts.

• Double Eagle is backed by private equity firms Encap Investments, Apollo Natural Resources Partners, and Elda River Capital.

• It owns more than 95,000 net acres in the Midland Basin.

• Double Eagle’s management team has a history of pulling together shale acreage and then flipping it to larger players, according to the WSJ.

• Double Eagle II and DoublePoint, both formerly existing arms of Double Eagle, previously sold to iterations of Pioneer Natural Resources (now ExxonMobil).

Broader implications:

• According to Enverus, U.S. upstream M&A activity totaled $105 billion in 2024, making it the third highest year after 2014 and 2023.

• Some are projecting that upstream M&A in the U.S. may slow down in 2025 as quality shale inventory is diminishing and oil prices have been on a downward trend.

• However, according to Andrew Dittmar, Enverus’ director of Intelligence Team, “the need for scale and replacing drilled inventory means smaller E&Ps can’t simply sit out of the market.”

• Gas-focused M&A increased four times and totaled more than $20 billion in 2024, according to Enverus.

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Commonwealth LNG Receives the First Non-FTA Approval from Trump 2.0

Evan Bakchev/ Shutterstock.com

On Friday, Commonwealth LNG announced that it received a conditional non-free trade agreement export authorization from the U.S. Department of Energy. This is the first approval for LNG export to non-FTA countries since Trump returned to the White House.

The latest:

• On 14 February 2025, President Trump joined Chris Wright, the newly appointed Secretary of Energy, to announce the first LNG export approval for Commonwealth LNG.

• According to Commonwealth LNG, it plans to take FID on the project in September 2025 and start construction.

• This project was amongst the “hardest hit” by the Department of Energy pause during the Biden Administration, according to Ben Dell, Commonwealth LNG chairman and managing director from Kimmeridge, the asset management company that is the majority owner in Commonwealth LNG. 

About Commonwealth LNG:

• Commonwealth LNG is a Houston-based, private company.

• It is majority owned by Kimmeridge and produces about 400 million cubic feet of gas per day in Texas.

• The Commonwealth LNG project is a 9.5-million-tons-per-annum export facility on the west bank of the Calcasieu Ship Channel near Cameron, Louisiana.

• Commonwealth LNG said that it is using a “highly modularized methodology,” to streamline scheduling and reduce capital costs.

• Gas is supplied by a 3-mile pipeline interconnected to two major pipeline systems.

• Kimmeridge said that it wants to keep 2 million tons per annum of LNG from Commonwealth LNG.

• According to Dell, the $11-billion project will employ about 2,000 workers at the peak of its construction, in addition to 270 regular jobs once operations begin.

Commonwealth LNG progress:

• Q4 2022: Commonwealth received FERC approval

• Q2 2023: Commonwealth completed FEED with Technip Energies

• Q1 2029: Plans to produce first LNG

Commonwealth gas sales agreements:

• Commonwealth LNG previously held one binding long-term gas Sales and Purchase Agreement (SPA) with Australia’s Woodside Energy for 2 million tons per annum.

• In September 2024, Commonwealth LNG signed Heads of Terms agreement with Glencore for 2 million tons per annum for 20 years.

• In addition, Commonwealth LNG said it had a series of preliminary offtake agreements.

What they are saying:

• “Today marks one of many steps that the DOE will be taking to assure our future as a reliable energy supplier to the world and resume regular order to our regulatory responsibilities over natural gas exports,” said Wright.

• “Today’s actions demonstrate that President Trump is prioritizing the American energy industry, and we are both pleased and grateful to have achieved these important regulatory objectives,” said Farhad Ahrabi, president and CEO of Commonwealth LNG.

What to watch:

• The DOE said that it expects to issue a final order to Commonwealth LNG later in 2025.

• Will Commonwealth LNG be able sign more firm gas SPAs in the coming months?

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✉️ To get in touch with Shangyou, send an email to editorial@aapg.org.