Private equity (PE) firm Carlyle Group LP said Sept. 11 it would fund the development of Diamondback Energy Inc.'s (NASDAQ: FANG) oil and gas assets in the prolific Permian Basin of Texas.
A Carlyle fund and Diamondback will jointly invest $620 million to develop the assets in the San Pedro area of Pecos County, Texas, within the Southern Delaware Basin, the companies said.
Carlyle will invest up to 85% for the development program over five years and the PE firm's interests will largely revert to Diamondback after certain performance milestones are met.
Diamondback's shares were up 2.2% at $114.58 in morning trade.
Last month, Diamondback agreed to buy shale rival Energen Corp. (NYSE: EGN) in an all-stock deal valued at $9.2 billion, to get an expanded footprint in the Permian, the largest and fastest-growing oil field in the U.S.
The parties must now renegotiate a deal that would transfer Breitburn's Permian reserves to investors including Elliott and WL Ross through their participation in a $775 million rights offering.
Crescent Point Energy's strategy to sell assets to reduce debt and use a part of the money to finance its expansion in oil and gas production is yet to pay off.
Lime Rock’s $1.8 billion “stalking horse” offer tops a $1.6 billion enterprise valuation by Breitburn’s investment bank.