The June 3 industry shakeup further consolidates both the booming, but maturing Permian Basin in West Texas and the niche minerals and royalties space in which companies own the rights to fossil fuels beneath the surface, but do not drill or operate the wells.

Viper is the publicly traded minerals subsidiary of Midland, Texas-based Diamondback Energy (ranked 383 in the Fortune 500), which continues to rapidly expand as the largest Permian oil and gas producer focused only on the West Texas region.

“The combination of Viper and Sitio signifies an important moment for mineral and royalty interests,” said Diamondback and Viper CEO Kaes Van’t Hof in a prepared statement. “This combination creates a leader in size, scale, float, liquidity, and access to investment-grade capital in the highly fragmented minerals industry.”

The deal allows the expanded Viper the scale to compete for capital even with large-cap exploration and production players that own and operate their own oil and gas wells, Van’t Hof added.

The deal is the biggest in the minerals sector since Sitio first emerged as a power player in 2022 through its $4.8 billion combination with Brigham Minerals.

The $4.1 billion equity deal, including $1.1 billion in debt assumption, represents an almost 15% premium on Sitio’s stock value, which rose by 12% in early trading June 3. The deal is expected to close in the third quarter.

Viper’s stock largely held flat in early trading with a market cap of about $11.5 billion, while Diamondback rose 1% to a value of more than $40 billion.

Diamondback’s rapid growth

Diamondback’s ascent continues after its nearly $4.1 billion acquisition of Double Eagle assets on April 1—a seemingly popular acquisition price for Diamondback—and its much larger $26 billion deal for Endeavor Energy Resources last year.

Earlier this year, Sitio CEO Chris Conoscenti told this reporter that he saw 2025 as a growth opportunity through acquisitions. However, in the publicly traded energy space, a company is always for sale when the offer is right.

In the booming Permian, which produces roughly 40% of the nation’s crude oil and much of the natural gas, propane, butane, and ethane as well, Viper is more strongly positioned in the Permian’s eastern Midland Basin, while Sitio is bigger in the western Delaware Basin that extends into southeastern New Mexico.

“This transaction is the next logical step in Sitio’s evolution,” said Sitio chairman Noam Lockshin in a statement. “By adding Sitio’s coverage of the Delaware Basin to Viper’s position in the Midland Basin, the combined company will be well positioned in the Permian for years to come.”

The deal expands Viper’s minerals footprint in the Permian by about 25,300 net royalty acres to a total of 85,700 net acres, about 43% of which are operated by the parent Diamondback, according to Viper. The net royalty acreage represents the geographic scale and value of Viper’s ownership position of the unrecovered oil and gas still underground.

The merger also expanded Viper beyond the Permian a bit with 9,000 net royalty acres in other oil and gas basins in or near South Texas, Colorado, and North Dakota.

“We are still focused on the Permian, and will hold the other basins for now—but eventually might sell them if prices improve,” Van’t Hof told Fortune about the non-core assets being acquired.

Diamondback is expected to own roughly 41% of Viper’s outstanding shares after the deal, down from a majority ownership today.

“While this transaction will reduce Diamondback’s ownership in pro forma Viper,” Van’t Hof stated, “it does not reduce the significance of the relationship between Diamondback and Viper. The Diamondback drill bit remains Viper’s biggest competitive advantage and the most visible source of long-term production growth at Viper.

“Mineral interests offer the highest form of security and upside in the oil field, and any and all benefits an operator manages to unlock accrues directly to the mineral holder without any capital risk, forever,” he added.