Business
Diamondback Energy, Inc. and Five Point Energy LLC Form Deep Blue Midland Basin LLC
Creates The Premier Sustainable Water Management Platform in the Midland Basin MIDLAND, Texas, Sept. 11, 2023 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc.
About this update from Diamondback Energy, Inc.
[{"type":"text","content":"Creates The Premier Sustainable Water Management Platform in the Midland Basin\nMIDLAND, Texas, Sept. 11, 2023 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (NASDAQ: FANG) (\"Diamondback\") and Five Point Energy LLC (“Five Point”) announced today the formation of a new joint venture entity, Deep Blue Midland Basin LLC (“Deep Blue”). This strategic joint venture creates the largest independent water infrastructure platform in the Midland Basin with substantial excess capacity in place to pursue third-party growth. Deep Blue Highlights: Integrated midstream water infrastructure network with over 800 miles of pipelines for gathering, transport, disposal and reusePermitted disposal capacity of approximately 2 million barrels per day and over 65 million barrels of water storageExtensive recycle facilities in place with capacity to supply over 500,000 barrels per day of recycled water for completions activityInitial dedication across substantially all of Diamondback’s acreage in the Midland Basin As part of the transaction, Diamondback entered into a 15-year dedication for its produced water and supply water within a 12-county area of mutual interest in the Midland Basin. Diamondback will retain a 30% equity interest in Deep Blue and received approximately $500 million in upfront cash proceeds, with potential for more cash proceeds through performance-based earnouts over the next 24 months. Additionally, Five Point and Diamondback anticipate collectively contributing $500 million in follow-on equity capital to fund future growth projects and acquisitions. In conjunction with closing the joint venture, Deep Blue also executed long-term acreage dedications with two investment-grade customers, totaling over 20,000 acres with expected produced water volumes of over 75,000 barrels per day during 2024. Scott Mitchell, CEO of Deep Blue said, “Deep Blue is thrilled to announce our partnership with Diamondback and Five Point in the Midland Basin. This joint venture affords us the unique opportunity to execute on our vision of sustainable produced water management utilizing one of the largest platforms in the core of the Midland Basin. In addition to supporting Diamondback’s long-term growth plans and advancing their reuse objectives, Deep Blue plans to grow its footprint while driving the advancement of new technology solutions for our customer...