Transaction Details: 

The Carlyle Group and Diamondback Energy have entered into an agreement to fund the development of Diamondback’s oil and gas assets in the San Pedro area of Pecos County, Texas within the Southern Delaware Basin.

According to a Reuters report, the agreement calls for ~$620 million in total development expenditures, with Carlyle funding 85% (or ~$530 million) of the total over a five year period.

After certain performance hurdles are achieved in the program, Carlyle’s working interests will largely revert to Diamondback.

This deal comes shortly after Diamondback struck a $9.2B takeover deal with Energen Corp.

Vince Hahn, Managing Director on the Carlyle Energy Mezzanine Opportunities team, stated, “We are incredibly excited to start this partnership with Diamondback, which has demonstrated year-after-year excellence in developing the Permian basin.”

Travis Stice, Chief Executive Officer of Diamondback, further noted, “This joint venture will allow Diamondback to bring forward present value on the southeastern portion of our Pecos County acreage, with added benefit to our minerals and midstream businesses. We look forward to our partnership with a group as well respected as The Carlyle Group.”

UBS Investment Bank served as sole financial advisor to Diamondback on the transaction, while Vinson & Elkins was counsel to Carlyle and Akin Gump to Diamondback.

Permian - Delaware Basin Deal Activity In Last 12 Months