Diamondback, KKR Buy Stake in Deep Blue Water
The deal gives Diamondback and KKR full ownership of an integrated water infrastructure system serving the Midland Basin.
Updated on Nov. 10, 2026 in Utilities
Diamondback Energy and KKR agreed to jointly acquire Five Point Infrastructure's 70% stake in Deep Blue Midland Basin LLC, which will give the two companies 100% ownership of the business. Deep Blue operates integrated water infrastructure serving the Midland Basin.
Why it matters
Diamondback's core operations require transportation of nearly 2 million barrels of water per day, and the Deep Blue system is critical to that work. The acquisition secures reliable water transportation capability for Diamondback over the long term.
Diamondback holds 30% of Deep Blue and Five Point holds 70%, with the pending deal bringing full ownership to Diamondback and KKR. The business supports operations that move nearly 2 million barrels of water per day, and closing is expected in Q4 2026.
The players
Diamondback Energy
Diamondback Energy is an oil and gas producer headquartered in Midland, Texas, whose core operations in the Permian Basin depend on large-scale water handling.
KKR
KKR is a global investment firm that invests through infrastructure funds such as KKR Global Infrastructure Investors V.
Five Point Infrastructure
Five Point Infrastructure is the infrastructure investor that held a 70% stake in Deep Blue Midland Basin LLC before agreeing to sell it.
The details
Deep Blue Midland Basin LLC was formed in 2023 as a joint venture between Diamondback and Five Point Infrastructure and provides sourcing, transportation, storage, recycling, and disposal of water across the full water lifecycle. KKR's investment will be funded primarily through KKR Global Infrastructure Investors V.
Timeline
Deep Blue Midland Basin LLC was formed in 2023 as a joint venture.
Diamondback filed its Annual Report on Form 10-K with the SEC on February 25, 2026.
Diamondback and KKR announced the agreement on Nov. 10, 2026.
The transaction is expected to close in Q4 2026.
Market Landscape
Oil producers in the Permian Basin have increasingly brought water handling under their own control because produced-water volumes now rival crude output in the region. This transaction places Diamondback and KKR in direct competition with other midstream water providers serving the Midland Basin.
Reliable water handling for Permian producers can affect drilling schedules and the regional supply of oilfield services that employ Midland-area workers. Changes in water disposal costs may ultimately shape the economics of local oil production.
The takeaway
Water logistics are becoming a strategic asset for oil producers, and control of that infrastructure can shape operating reliability as production in the Midland Basin continues.
What happens next
The transaction is expected to close in Q4 2026, subject to customary regulatory approvals and closing conditions.
Further reading
Explore more Midland utilities coverage to see how water infrastructure fits into the regional energy supply chain.
