U.S. Geological Survey / Public domain
MIDLAND, Texas – Diamondback Energy and KKR have agreed to buy Five Point Infrastructure’s 70% stake in Deep Blue Midland Basin, the water-handling business that serves oil and gas producers in West Texas.
Diamondback already owns the other 30%. The purchase would put all of Deep Blue under the joint ownership of Diamondback and KKR when it closes. The companies did not disclose a purchase price.
The deal is for cash and is expected to close in the fourth quarter of 2026, subject to regulatory approvals and other closing conditions, according to the seller’s announcement. It has not closed.
Deep Blue supplies, moves, stores, recycles and disposes of water for energy producers. In simple terms, oil wells also bring water to the surface. That water needs to be collected and handled, rather than left at the well. A connected network gives producers a way to move it for treatment, reuse or disposal, while also supplying water for their operations.
The scale matters to Diamondback. Its chief executive, Kaes Van’t Hof, said the company’s core operations require reliable transportation of nearly 2 million barrels of water a day. He said buying the stake alongside KKR would secure that capability for the long term.
Five Point said Deep Blue manages more than 2.2 million barrels of water a day and has more than 2,000 miles of pipeline. The network was formed in 2023 as a joint venture between Five Point and Diamondback and grew through construction and acquisitions.
In the buyers’ announcement, the companies said the business helps producers reuse more water and rely less on freshwater supplies.
KKR said its investment will be funded mainly through KKR Global Infrastructure Investors V. The buyers did not disclose how ownership of Deep Blue would be split between them after closing.
Diamondback and KKR also said they see opportunities to work together on other infrastructure in the Permian Basin. Those discussions are separate from the agreement to buy Five Point’s interest in Deep Blue.
JBizNews Desk | Midland
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