Diamondback Energy, Kinetik Strengthen Stake In EPIC Crude With New Deal And Long-Term Commitments

Diamondback Energy, Inc. FANG, Kinetik Holdings Inc. KNTK, and EPIC Midstream Holdings disclosed a series of transactions to enhance the growth and financial profile of EPIC Crude Holdings, LP.

As part of the deal, Diamondback and Kinetik acquired a 30% equity interest in EPIC Crude, with each now owning 27.5% of the company.

EPIC Midstream holds a 45% equity interest in EPIC Crude and manages its operations.

EPIC Crude transports over 600 MBpd and has secured MVCs for about 90% of its 2025 volumes, extending the weighted average contract life. Its strategy allows customers access to all markets and docks in Corpus Christi, as well as the Dated Brent market, through the EPIC dock.

Diamondback is increasing its commitment to 200 MBpd to accommodate additional crude from its merger with Endeavor Energy Resources, positioning it as the third-largest crude producer in the Permian Basin.

On the other hand, Kinetik is establishing a new transportation arrangement with EPIC Crude, linking its crude gathering system to the EPIC Crude pipeline.

The combined long-term volume commitments from both partners will begin in 2025 and extend to 2035, representing over 33% of EPIC Crude’s capacity.

These efforts aim to reduce costs and enhance financial returns, ensuring long-term success and strategic alignment among the partners.

Kaes Van’t Hof, President and Chief Financial Officer of Diamondback, said, “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.”

Jamie Welch, President and Chief Executive Officer of Kinetik, stated, “Our volume commitment, alongside Diamondback, will generate incremental value for our crude customers seeking access to a premium market.”

Price Action: FANG shares are up 0.18% at $185.58, and KNTK is down 0.18% at $47.20 at the last check Tuesday.

Image via Shutterstock

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