Diamondback & Kinetik Secure 30% Interest in EPIC Crude Pipeline

Core Insights - Diamondback Energy, Inc. (FANG) and Kinetik Holdings Inc. (KNTK) have entered into transactions with EPIC Midstream Holdings LP to strengthen the financial and operational aspects of EPIC Crude Holdings, LP, enhancing growth prospects and strategic alignment [1][2] Group 1: Transaction Details - FANG and KNTK acquired a 30% equity interest in the EPIC Crude pipeline system, with each now owning 27.5%, while EPIC Midstream retains a 45% stake [2] - The collaboration aims to enhance crude oil transportation capacity from the Permian Basin, a key oil-producing region [2] Group 2: Volume Commitments - FANG has increased its volume commitment to transport 200,000 barrels per day through EPIC Crude's pipeline, following its merger with Endeavor Energy Resources [3] - Long-term volume commitments from FANG and KNTK will extend from 2025 to 2035, representing over 33% of EPIC Crude's volume capacity, supported by minimum volume commitments (MVCs) [6][7] Group 3: Strategic Importance - EPIC Crude is positioned as a critical player in the Permian Basin, capable of transporting over 600,000 barrels per day, with contracts or MVCs secured for approximately 90% of its total volumes by 2025 [8] - The pipeline offers access to multiple markets, including Corpus Christi and the Dated Brent market, optimizing pricing for producers [9] Group 4: Financial Strength and Expansion - EPIC Crude's financial profile is improving, supported by increasing credit ratings and long-term contracts with investment-grade customers [10] - Potential expansion projects could enhance transport capacity with minimal capital investment, underwritten by contracts with FANG, KNTK, and other partners [11] Group 5: Governance and Future Outlook - FANG and KNTK's increased governance roles in the joint venture provide them with greater influence over EPIC Crude's strategic direction [13] - The series of transactions reinforces EPIC Crude's importance as a transportation link for crude oil producers in the Permian Basin, positioning it for long-term success [14][15]