Diamondback Energy and KKR to Acquire Deep Blue Midland Basin from Five Point Infrastructure

(NASDAQ:FANG) Diamondback Energy, Inc. and KKR (NYSE:KKR) have entered into an agreement to jointly acquire Five Point Infrastructure’s 70% stake in Deep Blue Midland Basin LLC (“Deep Blue”), a full-cycle water infrastructure platform in the Midland Basin. After the transaction, Diamondback and KKR will jointly own 100% of Deep Blue, with Diamondback building on its existing 30% ownership interest. Deep Blue was formed in 2023 as a joint venture between Diamondback and Five Point and operates an integrated water infrastructure network providing sourcing, transportation, storage, recycling, and disposal services. The Deep Blue system supports Diamondback’s core operations, which require the reliable transportation of nearly 2 million barrels of water per day. The transaction is expected to close in Q4 2026, subject to customary regulatory approvals and closing conditions. KKR’s investment in the transaction will be funded primarily through KKR Global Infrastructure Investors V. The partnership leverages Diamondback’s operational expertise and KKR’s experience in scaling energy sector businesses. Kaes Van’t Hof, Chief Executive Officer of Diamondback, stated that acquiring Five Point’s 70% interest secures critical water infrastructure capabilities for the long term and positions the partnership for growth, including potential expansion outside oil and gas through new technology and industrial use cases. James Cunningham, Partner at KKR, commented that Deep Blue is important for supporting energy production in the Permian Basin and that the investment is seen as a first step toward broader collaboration in essential infrastructure. The companies highlighted opportunities for further collaboration to meet the region’s evolving infrastructure needs. Diamondback is focused on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas.