Diamondback Energy is getting deeper in the Midland Basin (pictured) through an asset swap with TRP Energy. (Source: Shutterstock.com)
Fresh off closing a blockbuster acquisition of Endeavor Energy Resources, Diamondback Energy is getting deeper in the Midland Basin through an acreage trade with TRP Energy.
On Nov. 3, Diamondback and TRP entered into an agreement under which Diamondback will trade certain Delaware Basin assets and pay $238 million in cash in exchange for TRP’s Midland Basin assets.
TRP’s Midland assets include around 15,000 net acres in Upton and Reagan counties, Texas, and 55 remaining undeveloped operated locations, Diamondback said while announcing third-quarter earnings on Nov. 4. The deal also includes 18 DUCs.
The deal is expected to close in December.
In a Nov. 4 letter to shareholders, Diamondback CEO Travis Stice said the company’s combined acreage footprint with Endeavor gives it flexibility to look at different A&D opportunities across the Permian Basin.
“This is exemplified by a trade we just executed, where we signed an exchange agreement with TRP that allows us to play offense in our backyard by swapping a PDP-heavy asset in the Delaware Basin for a Midland Basin asset with more near-term development potential,” Stice said.
Diamondback said it traded TRP in exchange for assets in its Vermejo development area, located across Reeves, Loving, Ward and Winkler counties, Texas.
Diamondback closed a transformational $26 billion acquisition of private E&P Endeavor Energy Resources in September.
The Endeavor deal added 344,000 net Midland acres and roughly 2,300 core drilling locations.
To reduce debt from the acquisition, Diamondback has looked to monetize other parts of its portfolio, including Delaware Basin assets, non-operated interests and mineral and royalty holdings.
During the second quarter, Diamondback said it received proceeds of approximately $150 million as a result of continued portfolio pruning, including a $95 million sale of non-op Delaware Basin properties.
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