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Diamondback Energy To Acquire Additional Acreage In Midland Basin

Stocks in this article: FANG

MIDLAND, Texas, Feb. 18, 2014 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (Nasdaq:FANG) ("Diamondback" or the "Company") today announced the Company has entered into definitive purchase agreements with unrelated third party sellers to acquire additional leasehold interests in Martin County, Texas, in the Permian Basin, for an aggregate purchase price of approximately $174 million, subject to certain adjustments.

This transaction includes 6,450 gross (2,825 net) acres with a 43.8% working interest (75% net revenue interest) and net production of approximately 1,600 BOE/d (approximately 75% oil) in November 2013 from 145 gross (63 net) producing vertical wells. Net proved reserves, based on our internal estimates as of December 31, 2013, were approximately 4,185 MBOE. Our estimate of proved reserves is based on our analysis of production data provided by the sellers, as well as available geologic and other data, and the Company may revise its estimates following ownership of these properties. 

Diamondback believes the acreage is prospective for horizontal drilling in the Wolfcamp B, Lower Spraberry, Middle Spraberry, Wolfcamp A, Cline and Clearfork horizons, and has identified 42 potential horizontal drilling locations in each of the Wolfcamp B and Lower Spraberry horizons based on 160 acre spacing per well (or six across a section) and an aggregate of 112 potential horizontal drilling locations in the Middle Spraberry, Wolfcamp A, Cline and Clearfork intervals based on 120 acre spacing per well (or four across a section).

Under the terms of the existing joint operating agreement, the Company has made offers to the owners of the remaining 56.2% of the working interests to acquire their interests in the acreage. If all such owners were to sell their interests to us, the aggregate purchase would be approximately $397 million. Diamondback intends to finance the acquisition, subject to market conditions and other factors, with a combination of borrowings under its revolving credit facility and the issuance of debt and equity securities. 

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