Deep Blue Midland Basin LLC, the water midstream joint venture between Five Point Energy and Diamondback Energy, has acquired Environmental Disposal Systems (EDS) from Diamondback in a $750 million transaction. The deal cements Deep Blue as the largest water midstream operator in the Midland Basin.
Pre Acquisition Injection Volumes
Deep Blue already ranked near the top of Midland water gatherers and recyclers, with a strong footprint across Martin, Midland, and surrounding counties.
Post Acquisition Expanding Scale and Reach
The acquisition doubles Deep Blue’s system capacity: The addition of EDS doubles scale.
- 1.2 million barrels per day of treatment and recycling
- 1.6 million barrels per day gathered
- 3.4 million barrels per day permitted disposal
- Nearly 1,900 miles of interconnected pipe
- 783,000 dedicated acres under long-term agreements
The system now spans 12 counties, creating one of the most integrated footprints in the basin.
Growth Potential
Diamondback’s 15-year dedication plus a 30% retained equity stake keeps one of the basin’s largest producers tied in, while Deep Blue gains >2M Bbl/d of available disposal headroom for future growth.
What This Means for the Market:
- Scale: Largest single Midland water midstream footprint
- Integration: Disposal, gathering, recycling, supply, beneficial reuse
- Reach: 12-county AMI with Diamondback + diverse 3rd-party customers
- Contracts: Long-term, investment-grade anchor in Diamondback
- Upside: Disposal + recycling capacity headroom to absorb basin growth
In the Permian water midstream space, scale + anchor dedications = staying power. This deal positions Deep Blue not just as a consolidator, but as the benchmark for Midland Basin water management.