Diamondback Energy, Inc. (NASDAQ: FANG), Kinetik Holdings Inc. (NYSE: KNTK), and EPIC Midstream Holdings LP have announced a series of strategic transactions aimed at bolstering the growth and financial strength of EPIC Crude Holdings, LP. Key highlights of the deal include:
- Diamondback and Kinetik each acquired a 27.5% equity stake in EPIC Crude, while EPIC Midstream retains 45% ownership and continues managing operations.
- Diamondback increased its volume commitment on the EPIC Crude pipeline to 200 MBpd, driven by its recent merger with Endeavor Energy Resources, making it the third-largest crude producer in the Permian Basin.
- Kinetik secured a new transportation arrangement with EPIC Crude, including a connection between its crude gathering system and the EPIC Crude pipeline.
- Combined volume commitments from Diamondback and Kinetik will begin in 2025 and extend through 2035, representing over 33% of EPIC Crude’s capacity.
These transactions aim to strengthen EPIC Crude’s strategic alignment with its partners while enhancing financial returns and reducing costs. The company currently transports more than 600 MBpd and has secured long-term contracts for approximately 90% of its 2025 volumes.
Brian Freed, CEO of EPIC Midstream, emphasized the importance of the transactions, stating, “These actions position EPIC Crude for continued strategic and financial success. The long-term commitments from our partners highlight the asset’s critical role in transporting Permian Basin crude to the Corpus Christi market.”
Kaes Van’t Hof, President and CFO of Diamondback, added that the partnership secures reliable, cost-effective crude takeaway for their expanding portfolio, reinforcing EPIC Crude as their preferred pipeline.
Jamie Welch, CEO of Kinetik, also praised the collaboration, noting that the volume commitment alongside Diamondback will generate value for their crude customers.
Looking ahead, EPIC Crude plans to explore a potential expansion project, focused on increasing capacity with minimal capital investment through additional pumps. This expansion could be underwritten by fully secured contracts, with the partners having the option to utilize one-third of the expanded capacity.
