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Diamondback Energy To Acquire Additional Acreage In Midland Basin -- Increases 2014 Production Outlook And Provides Operations Update

Stocks in this article: FANG

MIDLAND, Texas, July 21, 2014 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (Nasdaq:FANG) ("Diamondback" or the "Company") today announced the Company has entered into a definitive purchase agreement with unrelated third party sellers to acquire additional leasehold interests in the Midland Basin for an aggregate purchase price of approximately $538 million, subject to certain adjustments. Upon completion, the acquisition will provide Diamondback with primarily operated leasehold interests, the majority of which are located in Midland and western Glasscock Counties.

Acquisition Highlights:

  • 16,773 gross (13,136 net) acres, 88% of which are operated
  • Net production of approximately 2,173 BOE/d in May 2014 from 131 gross (94 net) producing wells.
  • Net proved reserves, based on Diamondback's internal estimates as of June 2014, were approximately 5.2 MMBOE (on a 2-stream basis).

Diamondback expects horizontal development on this acreage to represent years of growth potential:

  • 396 gross identified potential horizontal drilling locations
  • 256 net identified potential horizontal drilling locations

The Company believes the acreage is prospective for horizontal drilling in the Wolfcamp B, Lower Spraberry, Clearfork, Middle Spraberry, Wolfcamp A and Wolfcamp D (aka Cline) formations.

Upon closing, the acquisition is expected to add 13,136 net acres to Diamondback's total position in the Midland Basin, increasing it to more than 85,000 net acres.

Acreage Breakdown by County  
  Gross Net
     
Midland 6,018 4,773
     
Glasscock 8,265 6,814
     
Reagan 2,170 1,402
     
Upton 320 147
     
Total 16,773 13,136
     

The acquisition is scheduled to close in early September 2014, however the transaction remains subject to completion of due diligence and satisfaction of other closing conditions, and there can be no assurance that Diamondback will acquire all or any portion of the acreage.

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