Akin Advises on Diamondback’s $750M Disposal Systems Sale to Deep Blue.
Akin has advised Diamondback Energy, Inc. (NASDAQ: FANG) in the sale of its subsidiary, Environmental Disposal Systems, LLC (EDS), to Deep Blue Midland Basin LLC (Deep Blue) for a total consideration of $750 million.
The transaction preserves Diamondback’s strategic alignment with Deep Blue. Under the agreement, Diamondback renewed its 15-year water dedication across a 12-county area in the Midland Basin and will retain a 30% equity interest in Deep Blue.
Diamondback expects to receive approximately $675 million in upfront cash proceeds, subject to customary closing conditions and adjustments, with the potential for up to $200 million in additional performance-based earnouts through 2028.
The acquisition significantly expands Deep Blue’s footprint, creating the largest independent water infrastructure platform in the Midland Basin, with expanded treatment, disposal and pipeline capacity across 780,000 dedicated acres.
Scott Mitchell, Chief Executive Officer of Deep Blue, commented: “This transaction enhances our footprint and accelerates our mission to optimize water management across the Midland Basin while prioritizing greater sustainability by recycling massive amounts of produced water for upstream development. It ensures our customers benefit from unmatched scale and innovative solutions while shaping the future of water management in the Midland Basin.”
Kaes Van’t Hof, Chief Executive Officer and Director of Diamondback, added: “This transaction provides meaningful value for Diamondback while allowing us to remain closely aligned with Deep Blue as both a partner and a customer. Together, we are creating the premier system that supports the most demanding development schedules in the Midland Basin.”
The Akin team was co-led by corporate partners John Goodgame and Leana Garipova, with support from counsel Tom Hillebrand and associates Hailey Marino, Emily Varley, Andrea Cabada, Brannen Caraway, and Paxton Merrill.
The broader team also included tax partner Alison Chen and associate Samir Halawi; antitrust partner Brian Rafkin and associate Kyle Everett; executive compensation & employee benefits partner Stephanie Bollheimer; labor & employment partner Lauren Leyden; intellectual property partner David Lee; environmental & natural resources practice head David Quigley and senior counsel Andrew Oelz; and debt finance partner Eric Muñoz.
Skadden, Arps, Slate, Meagher & Flom LLP and Vinson & Elkins LLP advised Deep Blue, while Piper Sandler & Co. served as financial advisor to Diamondback.
Diamondback Energy, Inc. (NASDAQ: FANG) is a Midland, Texas–based independent oil and natural gas company focused on the Permian Basin. Founded in 2007, it has grown rapidly through low-cost operations and strategic acquisitions, and is now ranked among the Fortune 500.
Deep Blue Midland Basin LLC is a Houston- and Midland-based water infrastructure company formed in 2023 as a joint venture between Diamondback Energy and Five Point Infrastructure. The firm develops and operates large-scale systems for gathering, transporting, recycling, and disposing of produced water, with more than 2 million barrels per day of capacity and an extensive pipeline network across the Midland Basin. Led by CEO Scott Mitchell, Deep Blue has quickly become the region’s largest independent water infrastructure platform.
Akin Gump Strauss Hauer & Feld LLP is a leading global law firm with over 900 lawyers across offices in the U.S., Europe, Asia, and the Middle East. Founded in 1945, the firm is recognized for excellence in complex transactions, litigation, financial restructuring, and public policy. Akin is known for its innovative, diverse, and collaborative culture, serving corporations, governments, and individuals with tailored legal solutions.
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