Diamondback, KKR to buy Deep Blue stake

Diamondback Energy and KKR have signed a definitive agreement to acquire Five Point Infrastructure’s 70% stake in Deep Blue Midland Basin LLC, a produced-water infrastructure platform in the Midland Basin. The cash transaction will transfer Five Point’s majority interest to Deep Blue’s existing minority owner, Diamondback, and to KKR. Upon completion, Diamondback and KKR will jointly own 100% of Deep Blue, consolidating control of the water infrastructure network that supports oil and gas operations in the region.

The transaction is expected to close in the fourth quarter of 2026, subject to applicable regulatory approvals and other customary closing conditions. KKR’s investment in the acquisition will be funded primarily through KKR Global Infrastructure Investors V. The sale marks a monetization step for Five Point Infrastructure and its limited partners after a period of investment and development in Deep Blue.

Deep Blue was founded in 2023 as a joint venture between Five Point and Diamondback to develop a produced-water infrastructure platform serving the Midland Basin. The company operates an integrated water infrastructure network with more than 2,000 miles of pipeline, providing sourcing, gathering, transportation, storage, treatment, recycling, reuse and disposal services to exploration and production customers.

Deep Blue’s systems are described as critical to Diamondback’s core operations, which require reliable transportation of nearly 2 million barrels of water per day. The platform aims to align water resources and infrastructure capacity with customer needs, supporting operational reliability through full-cycle water management solutions. Its stated goal is to minimize disposal through recycling and the use of technologies such as desalination and enhanced evaporation.

Diamondback, an independent oil and natural gas company headquartered in Midland, Texas, focuses on operations in the Permian Basin in West Texas and uses Deep Blue’s network for its water logistics. Diamondback’s leadership highlights the importance of the Deep Blue system for maintaining dependable water transportation to support its operations.

KKR views the Deep Blue investment as an opportunity to address growing water infrastructure needs in the Midland Basin and as a first step toward a broader relationship with Diamondback. Five Point’s management characterizes the sale as the culmination of establishing and scaling a water management platform to meet environmental and operational needs in the region, and Deep Blue’s management sees the new ownership structure as the next chapter in partnership with Diamondback and now KKR.