Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback”), Kinetik
Holdings Inc. (NYSE: KNTK) (“Kinetik”) and EPIC Midstream Holdings
LP (“EPIC Midstream”), today announced a series of transactions to
support the continued growth and strengthened financial profile of
EPIC Crude Holdings, LP (“EPIC Crude”), an affiliate of EPIC
Midstream, including:
- Diamondback and
Kinetik (together, the “Partners”) acquired a 30% equity interest
in EPIC Crude. The Partners now each own 27.5% of EPIC Crude.
- EPIC Midstream
continues to own a 45% equity interest in and manage the operations
of EPIC Crude.
- Diamondback is
converting its existing commitment on EPIC Crude into a
significantly larger volume commitment of 200 MBpd to accommodate
additional crude barrels from Diamondback’s newly completed merger
with Endeavor Energy Resources. As a result of that merger,
Diamondback is the third largest crude producer in the Permian
Basin.
- Kinetik is also
entering into a new transportation arrangement with EPIC Crude and
a new connection between Kinetik’s crude gathering system and the
EPIC Crude pipeline.
- The combined
long-term volume commitments from the Partners are expected to
commence in 2025 and extend until 2035, fully supported by minimum
volume commitments (“MVC”) and representing over 33% of EPIC
Crude’s volume capacity.
- EPIC Crude and
its Partners are continuing to focus on reducing controllable costs
and enhancing financial returns which will further maximize value
for all stakeholders of EPIC Crude.
- Taken together,
these actions will position EPIC Crude for long-term success while
increasing its long-term strategic alignment with Diamondback and
Kinetik.
EPIC Crude continues to transport more than 600
MBpd and has secured MVCs or contracts for approximately 90% of
2025 total volumes while substantially extending the weighted
average contract life. EPIC Crude’s differentiated strategy helps
its customers gain access to all markets and docks in Corpus
Christi, in addition to the Dated Brent market through the EPIC
dock.
“Along with our execution over the past couple
of years, these transactions position EPIC Crude for continued
strategic and financial success," said Brian Freed, Chief Executive
Officer of EPIC Midstream. “The business continues to be
transformed, and the strategic importance of this asset is
supported by our Partners’ long-term commitments. EPIC Crude
continues to be a critical asset for Permian Basin crude production
egress to the Corpus Christi market.”
“This series of transactions signifies
a major step in
ensuring reliable, cost-effective takeaway out
of the basin for our expanded crude portfolio for a
significant period of time, and positions EPIC Crude to
be our preferred crude pipeline given our increased ownership stake
and expanded governance role in the joint
venture,” said Kaes Van’t Hof, President and
Chief Financial Officer of Diamondback.
“We are excited to partner with Diamondback,
Ares Management funds and EPIC Midstream on these transactions,”
said Jamie Welch, President and Chief Executive Officer of Kinetik.
“Our volume commitment, alongside Diamondback, will generate
incremental value for our crude customers seeking access to a
premium market.”
“Going forward, we believe EPIC Crude is even
better positioned for shared business, customer and owner success,”
said Robert Kimmel, Partner in the Ares Private Equity Group. “We
remain excited to partner with Brian and his team in this
transformative next chapter for EPIC Crude.”
EPIC Crude’s financial profile continues to
strengthen and is supported by continued improvement expected in
its credit ratings. Its improving leverage, investment grade
customers, and long-term contract profile provide a strong
foundation for the business.
EPIC Crude has the only remaining opportunity
for a large-scale, highly economic crude oil pipeline expansion in
the Permian. The potential expansion project is highly economic
given its limited capital requirements, mostly focused on
additional pumps for the existing pipeline. EPIC Crude anticipates
the potential expansion project will be carried out with fully
underwritten contracts, with the Partners having an option for
approximately one-third of the expansion capacity.
About EPIC Midstream
EPIC was formed in 2017 to build, own and operate midstream
infrastructure in the Delaware, Midland and Eagle Ford basins.
EPIC’s Crude Oil Pipeline and NGL Pipeline each span approximately
700 miles and transport crude and natural gas liquids for delivery
from the Permian and Eagle Ford basins into the Corpus Christi
market. The Crude Oil Pipeline connects to the Port of Corpus
Christi, including EPIC’s Marine Terminal, third-party export
terminals and local refineries. EPIC’s NGL Pipeline has
connectivity to EPIC’s operated fractionation complex in Robstown,
Texas as well as Gulf Coast refiners, petrochemical companies and
export markets. EPIC is a portfolio company of funds managed by the
Private Equity Group of Ares Management. For more information,
visit www.epicmid.com.
About EPIC Crude
EPIC Crude Holdings, LP (“EPIC Crude”) was
formed in 2017 to build and operate the EPIC Crude Oil Pipeline, a
700-mile, 30” crude oil pipeline that extends from Orla, Texas to
the Port of Corpus Christi and services the Midland, Delaware and
Eagle Ford basins. The Crude Oil Pipeline is currently operating at
a capacity of greater than 600,000 barrels per day (bpd) and has a
maximum capacity of 1,000,000 bpd, as well as total operational
storage of approximately 7,500,000 barrels. EPIC Crude includes
terminals in Orla, Pecos, Saragosa, Crane, Wink, Midland, Helena
and Gardendale, with Port of Corpus Christi connectivity and export
access.
About Diamondback Energy, Inc.
Diamondback is an independent oil and natural gas company
headquartered in Midland, Texas focused on the
acquisition, development, exploration and exploitation of
unconventional, onshore oil and natural gas reserves primarily in
the Permian Basin in West Texas. For more
information, please visit www.diamondbackenergy.com.
About Kinetik Holdings Inc.
Kinetik is a fully integrated, pure-play,
Permian-to-Gulf Coast midstream C-corporation operating in the
Delaware Basin. Kinetik is headquartered in Houston and Midland,
Texas. Kinetik provides comprehensive gathering, transportation,
compression, processing and treating services for companies that
produce natural gas, natural gas liquids, crude oil and water.
Kinetik posts announcements, operational updates, investor
information and press releases on its
website, www.kinetik.com.
Investor and Media Contacts:
EPIC Midstream Holdings, LPMike GarberdingChief
Financial
Officer (346)
231-1776mike.garberding@epicmid.com
Kinetik Alex DurkeeInvestor
Relations (713)
574-4743adurkee@kinetik.com
DiamondbackAdam LawlisInvestor Relations(432)
221-7467alawlis@diamondbackenergy.com
Diamondback Energy (NASDAQ:FANG)
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