Five Point Infrastructure has agreed to sell its majority interest in Deep Blue Midland Basin to existing minority owner Diamondback Energy and KKR for cash consideration.
Deep Blue provides produced-water infrastructure in the Midland Basin, part of the larger Permian Basin energy region. The platform manages water generated through oil and gas production and provides systems that help operators transport, recycle, treat, and dispose of it.
Five Point founded Deep Blue approximately three years ago in partnership with Diamondback. The investment firm anticipated increasing demand for integrated and environmentally responsible water-management infrastructure as production activity expanded.
Produced water represents a significant operational requirement for energy companies. Large volumes must be handled safely and economically, while recycling can reduce the industry’s reliance on freshwater and lower disposal needs.
Deep Blue developed an integrated network serving Diamondback and other large customers. Five Point said the platform expanded its physical footprint, developed infrastructure, and introduced practices intended to improve water management throughout the Midland Basin.
The sale will transfer Five Point’s controlling position to Diamondback and KKR. Diamondback’s existing ownership and operational presence give it familiarity with Deep Blue’s assets, customers, and strategic importance.
KKR adds infrastructure investment experience and capital that can support the platform’s continued expansion. The ownership group will inherit a business that already has established customer relationships and a scaled regional network.
For Five Point, the transaction represents the realization of an investment thesis centered on essential environmental infrastructure for energy production. The firm created the platform, recruited management, formed a partnership with a major operator, and expanded the business before agreeing to sell its majority interest.
Deep Blue CEO Scott Mitchell will continue leading the company into its next chapter. His comments indicate that management expects to continue developing the platform with Diamondback and KKR.
The transaction also illustrates growing investor interest in produced-water assets as a distinct infrastructure category. These networks can provide long-duration services to operators while supporting water recycling and more coordinated management across producing regions.
The parties did not provide the cash consideration or a closing timetable in the announcement.
KEY QUOTES
“In founding Deep Blue three years ago, we foresaw a critical and expanding need for environmental water management solutions across the Midland Basin. We are proud to have established and scaled a world-class platform in partnership with Diamondback and a host of blue-chip customers, addressing their water management requirements through integrated systems and pioneering practices. Diamondback has been a great partner, and they are a superb operator. We wish Scott and the entire team continued success.”
David Capobianco, CEO and Managing Partner of Five Point Infrastructure
“When we launched Deep Blue, alongside Five Point and Diamondback, our vision was to build a best-in-class integrated produced water management platform in the Midland Basin. Five Point’s partnership and strategic guidance have been instrumental in bringing that vision to life, as we expanded our footprint, developed our infrastructure and met our customers’ needs. This transaction marks an exciting next chapter as we build on our foundation in continued strategic partnership with Diamondback and now KKR.”
Scott Mitchell, CEO of Deep Blue
