Diamondback Energy Inc. acquired a stake in a strategic Midland Basin gas gathering and processing joint venture (JV) through its midstream affiliate, Rattler Midstream LP, the major Permian shale producer said in a recent release.

“This deal highlights the strategic relationship between Diamondback and Rattler as this is the sixth significant joint venture with Diamondback as a major customer in which Rattler has participated,” Diamondback CEO Travis Stice commented in the company release on Oct. 12.

According to the release, Rattler completed the acquisition of a majority interest in a Midland Basin gas gathering and processing company from West Texas Gas Inc. and its affiliates through a JV with a private affiliate of an investment fund.

Rattler invested approximately $104 million in cash to acquire a minority interest in the JV. The JV’s assets primarily consist of an interconnected gas gathering system and six major gas processing plants servicing the Midland Basin with 925 MMcf/d of total processing capacity with additional gas gathering and processing expansions planned.

“With Diamondback deploying a majority of its development capital in the northern Midland Basin,” Stice continued “expanded gas gathering and processing capacity and an enhanced relationship with a crucial midstream partner with strong financial backing will support Diamondback’s upstream development.” 

Rattler Midstream is a growth-oriented Delaware limited partnership formed in July 2018 by Diamondback Energy to own, operate, develop and acquire midstream infrastructure assets in the Midland and Delaware basins of the Permian.

Headquartered in Midland, Texas, Diamondback is an independent oil and gas company with roughly 414,000 net acres across the Midland and Delaware basins. Within the past year, the large-cap Permian pure-play E&P has reallocated more capital to its Midland Basin position where the company drilled 88 gross horizontal wells and turned 89 operated horizontal wells to production within the first half of 2021.