Diamondback Energy forms water infrastructure JV with Five Point Energy
sasacvetkovic33/iStock via Getty Images
Diamondback Energy (NASDAQ:FANG) +0.6% pre-market Monday after saying it has formed a new joint venture entity with P-E firm Five Point Energy to create a water infrastructure network in the Midland Basin that is part of the Permian Basin in west Texas.
Diamondback (FANG), which will retain a 30% equity interest in the new Deep Blue Midland Basin venture, said it received a ~$500M upfront payment from Five Point, with the potential for more cash proceeds through performance-based earnouts over the next 24 months.
Diamondback (FANG) and Five Point also plan to contribute an additional $500M to fund future growth projects and acquisitions by Deep Blue Midland.
Diamondback (FANG) said the JV will create the largest independent water infrastructure platform in the Midland Basin, with more than 800 miles of pipelines for gathering, transport, disposal and reuse of water, which is used in fracking for oil and natural gas.
In conjunction with closing the JV, Deep Blue also executed long-term acreage dedications with two investment-grade customers, totaling more than 20K acres with expected produced water volumes exceeding 75K bbl/day during 2024.

More on Diamondback Energy

Seeking Alpha's Quant Rating on Diamondback Energy
Historical earnings data for Diamondback Energy
Dividend scorecard for Diamondback Energy
Financial information for Diamondback Energy
Diamondback Energy: Growth Story