(WO) – Diamondback Energy and KKR have agreed to jointly acquire Five Point Infrastructure’s 70% stake in Deep Blue Midland Basin, a water infrastructure company in the Permian’s Midland basin. Combined with Diamondback’s existing 30% interest, the two companies will own all of Deep Blue. Terms were not disclosed, and the deal is expected to close in the fourth quarter.
Diamondback and Five Point formed Deep Blue in 2023. It operates an integrated network that handles water sourcing, transportation, storage, recycling and disposal for E&P customers in the basin, helping operators increase water reuse and reduce freshwater use.
“The Deep Blue system is critical for Diamondback’s core operations, which require reliable transportation of nearly 2 million barrels of water per day,” said Kaes Van’t Hof, CEO of Diamondback. He said the partnership is positioned for traditional growth as well as opportunities outside oil and gas, through new technology and potential industrial uses in the Permian.
“Deep Blue plays an important role in supporting energy production in the Permian Basin, and we see a compelling opportunity to build on its strong foundation to meet the region’s growing water infrastructure needs,” said James Cunningham, a partner at KKR. KKR is funding its investment mainly through its KKR Global Infrastructure Investors V fund, and the companies said they see opportunities to work together on other infrastructure in the region.
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