The Investor
02 Sep 2025, 20:42
Deep Blue Acquires Environmental Disposal Systems from Diamondback Energy for $750M
MIDLAND, Texas, Sept. 2, 2025 – Deep Blue Midland Basin LLC, backed by Diamondback Energy (NASDAQ: FANG) and Five Point Infrastructure, announced it will acquire Environmental Disposal Systems (EDS) from Diamondback for $750 million, nearly doubling Deep Blue’s scale as the Midland Basin’s largest independent water infrastructure platform.
As part of the deal, Diamondback renewed a 15-year water dedication to Deep Blue and will retain a 30% equity stake in the joint venture. The company will receive $675 million in upfront cash proceeds and may earn up to $200 million in performance-based payments through 2028.
Following the acquisition, Deep Blue’s system will include:
• 1.2M barrels/day of treatment and recycling capacity
• 1.6M barrels/day of water gathered
• 3.4M barrels/day of permitted disposal capacity
• 1,871 miles of interconnected pipelines
• 783,000 dedicated acres
Diamondback CEO Kaes Van’t Hof said the transaction provides “meaningful value” while keeping the company aligned as both partner and customer. Deep Blue CEO Scott Mitchell emphasized the platform’s focus on sustainable produced water recycling to support upstream development.
MIDLAND, Texas, Sept. 2, 2025 – Deep Blue Midland Basin LLC, backed by Diamondback Energy (NASDAQ: FANG) and Five Point Infrastructure, announced it will acquire Environmental Disposal Systems (EDS) from Diamondback for $750 million, nearly doubling Deep Blue’s scale as the Midland Basin’s largest independent water infrastructure platform.
As part of the deal, Diamondback renewed a 15-year water dedication to Deep Blue and will retain a 30% equity stake in the joint venture. The company will receive $675 million in upfront cash proceeds and may earn up to $200 million in performance-based payments through 2028.
Following the acquisition, Deep Blue’s system will include:
• 1.2M barrels/day of treatment and recycling capacity
• 1.6M barrels/day of water gathered
• 3.4M barrels/day of permitted disposal capacity
• 1,871 miles of interconnected pipelines
• 783,000 dedicated acres
Diamondback CEO Kaes Van’t Hof said the transaction provides “meaningful value” while keeping the company aligned as both partner and customer. Deep Blue CEO Scott Mitchell emphasized the platform’s focus on sustainable produced water recycling to support upstream development.
