Diamondback Energy will attempt to buy rival Endeavor Energy Resources to create an energy giant in the Southwestern United States worth more than $50 billion.

Growing confidence in an economic recovery, particularly in the U.S., has driven massive deals in the energy sector in recent months, including Chevron’s $53 billion acquisition of Hess in October, and a $59.5 billion deal two weeks before that by Exxon Mobil, its biggest acquisition since buying Mobil two decades ago.

A tie-up between Diamondback and Endeavor, if it succeeds, would create a player in the massive Permian Basin oil and gas field that straddles Texas and New Mexico.

It would be the third largest producer in the Permian behind Exxon and Chevron, overseeing 838,000 acres and potentially producing 816,000 oil-equivalent barrels each day.

Diamondback said Monday that it will buy Endeavor in a cash-and-stock deal valued at about $26 billion.

Endeavor is the largest private operator in the Permian Basin. Drillers can pull more than 4 million barrels of oil equivalent from the Permian daily and the rush is on to secure prime real estate in the largest oil field in the United States with little sign that the U.S. economy is slowing as many had expected.

“We have evaluated every deal in the Permian Basin over the past decade and there has not been another opportunity that has come close to this scale and quality,” Diamondback Chairman and CEO Travis Stice said during a conference call.

Despite broad expectations that it would dip into recession in a turbulent global economy, the U.S. has proven surprisingly resilient, with a red hot job market and economic growth that has surprised almost everyone. The nation’s economy grew at an unexpectedly brisk 3.3% annual pace from October through December.

In addition, oil and gas prices have remained relatively flat of late as OPEC has been cutting production in an attempt to raise prices. Lower oil prices are good for U.S. drivers, as it means they’ll pay less at gas pumps. However, it’s bad news for OPEC+ countries whose oil income bolsters their economies and who have faced setbacks in pushing prices higher despite initial fears that the Israel-Hamas war could affect oil flows.

U.S. oil production has hit records as OPEC+ has cut back, with producers outside the group expected to keep leading global growth in oil supply in 2024, the International Energy Agency said in November.

“Diamondback and Endeavor’s assets are highly contiguous and offer opportunities to capture operational and overhead synergies through a combination,” Stifel’s Derrick Whitfield said in an analyst note, explaining that the deal will add low-cost inventory to Diamondback’s Midland Basin position.

The combined company will be based in Midland, Texas.

“Our companies share a similar culture and operating philosophy and are headquartered across the street from one another, which should allow for a seamless integration of our two teams,” Stice said in a prepared statement.