Midland’s Diamondback Energy said Monday it formed a joint venture with Houston-based Five Point Energy to create the largest independent water infrastructure platform in Midland Basin. Deep Blue Midland Basin, with headquarters in Midland and Houston, is an integrated midstream water infrastructure network with 800 miles of pipelines for gathering, transport, disposal and reuse. Deep Blue has permitted disposal capacity of 2 million barrels per day, 65 million barrels of water storage, and recycle facilities with capacity to supply more than 500,000 barrels per day of recycled water for completions.
Diamondback entered into a 15-year dedication for its produced water and supply water in a 12-county area of mutual interest in Midland Basin. Diamondback retains 30 percent equity interest in Deep Blue. Scott Mitchell, Deep Blue CEO, said, “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.”
Kaes Van’t Hof, president and CFO of Diamondback, added, “We have spent nearly a decade building a differentiated water infrastructure platform in the Midland Basin and believe this is the opportune time to monetize this business while retaining meaningful upside through our equity ownership. The joint venture has already had significant third-party commercial success.”