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Deep Blue Midland Basin LLC Acquires Environmental Disposal Systems, LLC from Diamondback Energy, Inc.
Globenewswire· 2025-09-02 12:00
Core Insights - Deep Blue Midland Basin LLC has announced the acquisition of Environmental Disposal Systems, LLC from Diamondback Energy, significantly enhancing its position as the largest independent water infrastructure platform in the Midland Basin [1][2] - The acquisition is valued at $750 million, with Diamondback retaining a 30% equity interest in Deep Blue and receiving approximately $675 million in upfront cash, along with potential performance-based earnouts of up to $200 million by the end of 2028 [2][5] - This transaction is expected to create operational and commercial synergies, broadening Deep Blue's customer base and enhancing its capabilities in sustainable produced water management [3][4] Company Overview - Deep Blue was formed in 2023 as a joint venture between Diamondback and Five Point Infrastructure, rapidly establishing itself as a leader in the Midland Basin's water infrastructure sector [4][6] - The company operates an integrated midstream water infrastructure network, managing significant volumes of water for exploration and production companies, with a treatment and recycling capacity of 1.2 million barrels per day and a disposal capacity of 3.4 million barrels per day [6][7] - Deep Blue aims to minimize water disposal through advanced recycling technologies and sustainable practices, positioning itself as a pioneer in resource-efficient water management [7] Strategic Implications - The acquisition is seen as a strategic move to optimize water management in the Midland Basin, ensuring customers benefit from enhanced scale and innovative solutions [3][5] - Diamondback's continued partnership with Deep Blue as both a customer and equity holder underscores the alignment of interests and the potential for future growth in the water management sector [5] - Five Point Infrastructure's involvement highlights the commitment to setting industry standards in water management practices across U.S. energy production [5]
WESTERN MIDSTREAM TO ACQUIRE ARIS WATER SOLUTIONS
Prnewswire· 2025-08-06 20:05
Core Viewpoint - Western Midstream Partners, LP ("WES") is acquiring Aris Water Solutions, Inc. ("Aris") in a transaction valued at approximately $1.5 billion, which includes both equity and cash components [1][2]. Transaction Details - The acquisition involves Aris shareholders receiving 0.625 common units of WES for each Aris share, with an option for $25.00 per share in cash, subject to proration, with a maximum cash consideration of $415 million [1][9]. - The total enterprise value of the transaction is approximately $2.0 billion before transaction costs [1]. - The transaction is expected to close in the fourth quarter of 2025, pending regulatory and shareholder approvals [2]. Strategic Rationale - The merger is aimed at creating a leading produced-water gathering, disposal, and recycling business, enhancing WES's ability to meet customer needs in the Delaware Basin [5][6]. - The integration of Aris's assets will expand WES's footprint into Lea and Eddy Counties, New Mexico, unlocking new throughput opportunities across its natural gas, crude oil, and produced water businesses [3][6]. - The combined infrastructure will create a fully integrated produced-water value chain, enhancing WES's competitive position in the market [6]. Financial Implications - The transaction is expected to be accretive to WES's 2026 Free Cash Flow per unit and represents an approximate 7.5x multiple on consensus 2026 EBITDA, including estimated cost synergies [6]. - WES is targeting $40 million in estimated annualized cost synergies from the acquisition [6]. Operational Enhancements - Aris's full-cycle water infrastructure includes approximately 790 miles of produced-water pipeline and significant handling and recycling capacities, which will complement WES's existing operations [3]. - The acquisition will diversify WES's customer base through Aris's long-term contracts and minimum-volume commitments with investment-grade counterparties [6][7]. Leadership Commentary - WES's CEO expressed excitement about the strategic combination, emphasizing the alignment with WES's strategy of acquiring high-quality midstream assets [4]. - Aris's CEO highlighted the transaction as a significant milestone, positioning the combined entity as a premier midstream water-solutions provider [8].