The consolidation wave in the oil patch has washed over another producer. Diamondback Energy (NASDAQ: FANG) has struck a deal to acquire privately held rival Endeavor Energy Resources for $26 billion. The acquisition will create a premier producer focused on the resource-rich Permian Basin.

The merger of Diamondback and Endeavor follows in the footsteps of recent deals by ExxonMobil (NYSE: XOM) and Occidental Petroleum (NYSE: OXY), which are bulking up their positions in the Permian Basin. Like those deals, the Diamondback-Endeavor tie-up will likely spark additional consolidation among oil companies.

Diamondback Energy is merging with Endeavor Energy Resources in a cash-and-stock deal valued at $26 billion, which includes the assumption of Endeavor's debt. The company will issue 117.3 million shares and pay $8 billion in cash. It plans to fund the cash portion of the deal with cash on hand, borrowings under its credit facility, and new debt.

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Source Fool.com