Diamondback Owes Up To $944 Million More For A Power Venture And A Gas Pipeline Stake
Up to $700 million of the $494 million to $944 million tied to the new ventures hinges on whether the power project finds outside financing.
Diamondback Energy, which explores for and produces oil and natural gas in the Permian Basin, expects to fund $494 million to $944 million of future commitments tied to two new joint ventures, a power-generation project and a natural gas pipeline, its quarterly report filed Wednesday says. The power venture alone could call for up to $700 million if it cannot raise independent financing.
A power venture with a financing trigger
A Diamondback subsidiary partnered with an outside company on September 8, 2026, to develop power generation. For a 35% membership interest, the company contributed about $78 million in pre-funded capital and 1,433 acres of surface land valued at about $22 million.
Its maximum loss exposure at September 30 was its investment of about $100 million. If the venture does not obtain and use independent financing, Diamondback has agreed to fund additional capital it estimates at roughly $250 million to $700 million.
Separately, the company signed a fixed-price contract to buy electrical power from 2028 through 2034. It expects about $519 million of power costs through 2034 under it: about $28 million in 2028, $132 million cumulatively across 2029 and 2030, and $359 million cumulatively across 2031 through 2034.
A stake in a Permian-to-Katy pipeline
The second venture, formed August 16, 2026, is meant to build and operate a pair of large intrastate gas lines linking the Permian Basin with Katy, Texas. Diamondback received a 7.5% interest and funded $25 million during the third quarter. Its maximum loss exposure, counting unfunded commitments, is about $269 million.
Both ventures are booked under the equity method, meaning the company does not control them and carries its stake in Other assets. That line stood at $951 million at September 30, against $523 million at year-end.
Cash calls meet near-term maturities
The company reported about $1.5 billion of senior notes maturing within the next 12 months. It held about $3.5 billion of liquidity at September 30, made up of $548 million in standalone cash and $3.0 billion available under its credit facility.
On its subsidiary Viper, which owns mineral and royalty interests, revolver borrowings stood at $810 million, against $95 million at the end of June. Viper's McElroy Ranch purchase of about $529 million, in September, was funded partly with those borrowings.
The company's board also approved raising 2026 capital spending guidance to about $3.95 billion to $4.00 billion, 6% above the midpoint of initial guidance. In October the company retired about $893 million of senior notes for about $889 million in cash, and on October 29 it raised its annual base dividend to $4.72 a share.
Whether the power venture secures outside financing determines if the $250 million to $700 million is called; the fiscal-year annual report will update the figures.
Sources
- 10-Q Filing — Diamondback Energy (FANG) — SEC EDGAR
- 10-Q Filing — Diamondback Energy (FANG), Q2 FY2026 filed 2026-08-05 (comparison basis) — SEC EDGAR
- Earnings release (8-K Item 2.02, diamondbackex991-11x2x26.htm) — Diamondback Energy, filed 2026-11-02 — SEC EDGAR
- Diamondback Q3 Earnings Beat on Higher Oil Prices and Production — Yahoo Finance
- Diamondback Bets on Permian Becoming Biggest US Gas Play | Rigzone — rigzone.com
- Diamondback Energy Raises Dividend and 2026 Oil Production Outlook | OilPrice.com — oilprice.com
- Diamondback: Q3 Earnings Snapshot — Associated Press
- Diamondback Energy (FANG) Beats Q3 Earnings and Revenue Estimates — Yahoo Finance
