DIAMONDBACK ACQUIRES MIDLAND ASSETS FROM LARIO OIL & GAS COMPANY

November 22, 2022

Diamondback Energy has entered into a definitive purchase agreement to acquire all leasehold interest and related assets of Lario Permian, LLC, a wholly owned subsidiary of Lario Oil & Gas Company, and certain associated sellers (collectively “Lario”) in exchange for 4.18 million shares of Diamondback common stock and $850 million of cash. The cash portion of this transaction is expected to be funded through a combination of cash on hand, borrowings under the Company’s credit facility and/or proceeds from a senior notes offering. The cash outlay at closing is expected to be approximately $775 million due to the expected Free Cash Flow to be generated by the acquired assets between the effective date and the closing date, which is expected to be January 31, 2023.
Asset Highlights:
• Approximately 25,000 gross (15,000 net) acres in the core of the Northern Midland Basin
• Full year 2023 estimated average production of approximately 18 MBo/d (25 MBoe/d) Diamondback expects to reduce operated rig count from two currently to one or less post-closing for 2023 development
• 154 estimated gross (132 net) horizontal locations in primary development targets with an average lateral length of over 9,400 feet; includes 20 DUCs
• Primary targets are the Middle Spraberry, Jo Mill, Lower Spraberry, Wolfcamp A and Wolfcamp B formations
• 28 gross upside locations in the Wolfcamp D based on recent well results
• 93% of acreage is operated with an average 86% working interest; 92% of acreage currently held by production
Diamondback expects this transaction, which is subject to customary closing conditions and adjustments, to close on January 31, 2023.
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.
Founded in 1927, Lario Oil & Gas Company was headquartered in Denver, Colorado.
(Source: Diamondback – Image: Lario wellsite in the 1960’s/ Lario Oil & Gas)