Diamondback Energy Inc (NASDAQ:FANG) disclosed a joint venture with Five Point Energy LLC called Deep Blue Midland Basin LLC.
As per the terms, FANG inked a 15-year dedication to producing and supplying water in a 12-county area of mutual interest in the Midland Basin.
FANG, which will have a 30% stake in Deep Blue, received upfront cash proceeds of around $500 million, with potential for more through performance-based earnouts over the next 24 months.
Apart from this, FANG and Five Point Energy expect to collectively contribute $500 million in follow-on equity capital to fund future projects and acquisitions.
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.
“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 customers.”
Also Read: Diamondback Energy’s Subsidiary Plans To Buy Stake In Permian Basin & More, Provides FY24 Outlook
Price Action: FANG shares are trading lower by 2.25% at $152.52 on the last check Monday.
