Capital Raise: The Carlyle Group signs $620m drillco agreement with Diamondback ($FANG)


[Context: On September 11, The Carlyle Group (NASDAQ: CG) announced a $620m drillco-type finncing with Diamondback Energy (NYSE: FANG). Further details, advisors and related links are below.]

Diamondback Energy | The Carlyle Group

The Carlyle Group’s Energy Mezzanine Team and Diamondback Energy Form Joint Venture; Carlyle Fund and Diamondback Will Provide $620 Million to Develop Oil & Gas Assets in Texas

New York, NY – 11 September 2018 – Global alternative asset manager The Carlyle Group L.P. (NASDAQ: CG) and Diamondback Energy, Inc. (NYSE: FANG) have entered into an agreement to fund the development of Diamondback’s oil and gas assets in the San Pedro area of Pecos County, Texas within the Southern Delaware basin.

As part of the joint venture, Carlyle Energy Mezzanine Opportunities Fund II L.P. will fund up to 85% for the development program over five years. After certain performance hurdles are achieved in the program, Carlyle’s working interests will largely revert to Diamondback.

Vince Hahn, Managing Director on the Carlyle Energy Mezzanine Opportunities team, stated, “We are incredibly excited to start this partnership with Diamondback, which has demonstrated year-after-year excellence in developing the Permian basin.”

Travis Stice, Chief Executive Officer of Diamondback, further noted, “This joint venture will allow Diamondback to bring forward present value on the southeastern portion of our Pecos County acreage, with added benefit to our minerals and midstream businesses. We look forward to our partnership with a group as well respected as The Carlyle Group.”

UBS Investment Bank served as sole financial advisor to Diamondback on the transaction, while Vinson & Elkins was counsel to Carlyle and Akin Gump to Diamondback.

The Carlyle Energy Mezzanine Opportunities Group, with 25 investment professionals based in New York and Houston, provides growth and refinancing capital to projects and companies in the energy sector through its two funds Carlyle Energy Mezzanine Opportunities Fund, L.P. and Carlyle Energy Mezzanine Opportunities Fund II, L.P., which have combined assets of approximately $4 billion as of June 30, 2018.

About The Carlyle Group

The Carlyle Group (NASDAQ: CG) is a global alternative asset manager with $210 billion of assets under management across 335 investment vehicles as of June 30, 2018. Carlyle’s purpose is to invest wisely and create value on behalf of its investors, many of whom are public pensions. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Credit and Investment Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,625 people in 31 offices across six continents.

About Diamondback Energy, Inc.

Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas.

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