The transaction could be valued at more than $5 billion, the Wall Street Journal reported Friday, citing unnamed sources.

Diamondback Energy Inc. is closing in on a deal to acquire closely held West Texas oil producer Double Eagle in a bid to further its dominance in the world’s biggest shale patch, according to people familiar with the matter.

Diamondback, the largest independent oil and gas producer in the Permian Basin, plans to formally announce the deal for Double Eagle as early as Tuesday morning, said the people, who asked to not be identified because the details are private. The transaction could be valued at more than $5 billion.

Representatives for Diamondback and Double Eagle both declined to comment.

The deal comes roughly a year after Diamondback announced its largest-ever transaction, the acquisition of Endeavor Energy Resources LP. The deal closed in September for about $28 billion. Since then, Diamondback has been among the worst-performing members of the S&P 500 Energy Index, down about 8%, amid concern that the family of Endeavor founder Autry Stephens may sell more of Diamondback’s stock it gained in the deal.

Shale deal-making had been expected to slow after $300 billion in acquisitions over the past couple of years had consolidated the available targets, according to industry consultant Enverus.

Double Eagle, whose private equity backers have included EnCap Investments LP, is one of the last big closely held producers to be taken over in the Permian, which stretches across West Texas and southeastern New Mexico.

Once the backbone of growth in the shale patch, closely held producers are expanding output at a slower pace as private equity exits the space. Capital raised by private equity firms in energy, which averaged $21 billion a year from 2010 through 2019, has tumbled since, averaging about $6 billion annually, according to Quantum Capital Group LLC.