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Released September 27, 2024 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Fresh on the heels of its $26 billion cash-and-stock deal in which it acquired rival Endeavor Energy, Diamondback Energy Incorporated (NASDAQ:FANG) (Midland, Texas), along with Kinetik Holdings (NYSE:KNTK) (Midland), has acquired a stake in the EPIC Crude Oil Pipeline, which runs about 700 miles from West Texas to a terminal in Corpus Christi.
Kinetik and Diamondback made a joint announcement regarding the acquisition earlier this week, stating that they each will own a 27.5% stake in the pipeline, while parent EPIC Midstream (San Antonio, Texas) will retain a 45% stake.
Diamondback's acquisition of Endeavor makes the company the third-largest oil producer in the Permian Basin, and the company's takeaway contract with the EPIC Pipeline under this new ownership will expand. "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, in a statement. The company is expanding its volume commitment on the pipeline to 200,000 barrels per day (BBL/d).
Kinetik also is entering a new transportation arrangement with EPIC Crude and establishing a new connection between Kinetik's crude oil gathering oil system and the pipeline. According to Kinetik, the EPIC Crude Oil Pipeline is currently operating above its 600,000-BBL/d capacity, which is expandable to up to 1 million BBL/d.
The combined volume commitments are expected to begin next year and extend into 2035, representing more than 33% of the pipeline's capacity.
Diamondback will probably need that extra capacity with a number of drilling programs underway in West Texas. Industrial Info is tracking seven unique Diamondback drilling programs in Texas, several of which will continue into subsequent years. In the Nakota project near Pecos, Texas, for example, Diamondback is drilling two 9,500-foot-deep horizontal wells. The company will continue drilling at the site next year, adding more well sites. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can learn more by viewing the related project reports.
Another program in the Spraberry formation is even more extensive and expected to result in more than 30 wells with depths ranging from 9,000 to 13,000 feet. Subscribers to Industrial Info's GMI Project Database can learn more by viewing the related project reports.
Industrial Info is tracking no active drilling programs from Kinetik but is following the company's two potential gas-processing projects in the Permian. One of these, an addition of a processing train at an existing plant, is just beginning and will expand the Pecos processing complex's capacity by 200 million cubic feet per day, bringing the plant's total processing capacity to 460 million cubic feet per day. Construction is expected to wrap up around the end of this year or early next year. Subscribers can click here to learn more about the project.
Another Kinetik project intends to establish a grassroot processing plant in the same vicinity that will add another 200 million cubic feet per day of processing capacity. This plant is expected to come online in 2026. Subscribers can click here to learn more.
Subscribers to Industrial Info's GMI Database can click here to view reports for all of the projects discussed in this article and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
Kinetik and Diamondback made a joint announcement regarding the acquisition earlier this week, stating that they each will own a 27.5% stake in the pipeline, while parent EPIC Midstream (San Antonio, Texas) will retain a 45% stake.
Diamondback's acquisition of Endeavor makes the company the third-largest oil producer in the Permian Basin, and the company's takeaway contract with the EPIC Pipeline under this new ownership will expand. "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, in a statement. The company is expanding its volume commitment on the pipeline to 200,000 barrels per day (BBL/d).
Kinetik also is entering a new transportation arrangement with EPIC Crude and establishing a new connection between Kinetik's crude oil gathering oil system and the pipeline. According to Kinetik, the EPIC Crude Oil Pipeline is currently operating above its 600,000-BBL/d capacity, which is expandable to up to 1 million BBL/d.
The combined volume commitments are expected to begin next year and extend into 2035, representing more than 33% of the pipeline's capacity.
Diamondback will probably need that extra capacity with a number of drilling programs underway in West Texas. Industrial Info is tracking seven unique Diamondback drilling programs in Texas, several of which will continue into subsequent years. In the Nakota project near Pecos, Texas, for example, Diamondback is drilling two 9,500-foot-deep horizontal wells. The company will continue drilling at the site next year, adding more well sites. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can learn more by viewing the related project reports.
Another program in the Spraberry formation is even more extensive and expected to result in more than 30 wells with depths ranging from 9,000 to 13,000 feet. Subscribers to Industrial Info's GMI Project Database can learn more by viewing the related project reports.
Industrial Info is tracking no active drilling programs from Kinetik but is following the company's two potential gas-processing projects in the Permian. One of these, an addition of a processing train at an existing plant, is just beginning and will expand the Pecos processing complex's capacity by 200 million cubic feet per day, bringing the plant's total processing capacity to 460 million cubic feet per day. Construction is expected to wrap up around the end of this year or early next year. Subscribers can click here to learn more about the project.
Another Kinetik project intends to establish a grassroot processing plant in the same vicinity that will add another 200 million cubic feet per day of processing capacity. This plant is expected to come online in 2026. Subscribers can click here to learn more.
Subscribers to Industrial Info's GMI Database can click here to view reports for all of the projects discussed in this article and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
