EOG Resources Inc (www.eogresources.com) is to buy privately held Yates Petroleum Corporation (www.yatespetroleum.com) for $2.5 billion in stock and cash, in a move to acquire acreage in the Permian Basin — one of the most cost-effective oil fields in the USA (it is a sedimentary basin largely contained in the western part of Texas and the south-eastern part of New Mexico).

The buy-out, which had been under negotiations for months, follows a number of Permian land purchases in the past year by companies that include Pioneer Natural Resources Co and WPX Energy Inc.

The Permian is the largest US oil field, with 189 of the country’s 481 total active rigs in early August, according to the latest data from energy-services firm Baker Hughes Inc.