Diamondback Energy Inc. (NASDAQ: FANG) announced it will sell its 27.5% equity interest in EPIC Crude Holdings LP to a subsidiary of Plains All American Pipeline LP and Plains GP Holdings for approximately $500 million in upfront cash.
The transaction includes an additional $96 million contingent payment if EPIC Crude sanctions a capacity expansion before year-end 2027. The deal values EPIC Crude at $2.85 billion based on the upfront payment terms.
The sale is expected to close by early 2026, subject to regulatory approval under the Hart-Scott-Rodino Antitrust Improvements Act and other standard closing conditions.
"This is a great outcome for Diamondback, generating a meaningful return on our invested capital," said Kaes Van't Hof, chief executive officer of Diamondback. "We look forward to maintaining our strong commercial relationship with the EPIC Crude and Plains teams as an anchor shipper on the EPIC Crude pipeline."
EPIC Crude Holdings operates as an affiliate of EPIC Midstream Holdings LP. Diamondback will continue as an anchor shipper on the EPIC Crude pipeline system following the transaction.
Akin Gump Strauss Hauer & Feld LLP served as legal counsel to Diamondback for the transaction. The Midland, Texas-based company focuses on oil and natural gas operations primarily in the Permian Basin.