David Wethe – (Bloomberg) — Diamondback Energy Inc. is in talks to form a power joint venture that would solve some of the shale giant’s own needs in the Permian Basin while also selling electricity to artificial intelligence data centers in West Texas.
Diamondback says it’s looking for an equity stake in a gas-fired power plant that would be built on some of its 65,000 surface acreage to supply electricity primarily to data centers. The biggest independent oil producer in the world’s busiest shale patch detailed plans to investors on an earnings call Tuesday.
“There’s been a lot of discussions around power,” President Kaes Van’t Hof said on the call. “Obviously, we’re short power in the basin.”
It’s the latest iteration of a Permian producer looking to cash in on the expected boom in data center development in Texas and the rest of the US. Exxon Mobil Corp. and Chevron Corp. have also announced interest in recent months for supplying power in various arrangements for AI data centers.
The shale producer could also benefit two-fold by supplying some of its own natural gas to the plant and by receiving some of that power for its own field operations, Van’t Hof said.
©2025 Bloomberg L.P.
Diamondback Energy owns around 65,000 net surface acres across the Midland and Delaware basins. (Source: Diamondback investor presentation)
READ NEXT: Diamondback Buys Double Eagle IV in $4.08 Billion Deal
A BIG YEAR FOR DIAMONDBACK
Last year marked a pivotal moment in Diamondback’s history, according to CEO Travis Stice in his February 24 letter to shareholders.
In a significant expansion move, Diamondback completed a $26 billion acquisition of the private Midland Basin E&P, Endeavor Energy Resources, in September, establishing itself as a leading producer in the Permian region.
This acquisition expanded Diamondback’s core holdings in the Midland Basin to approximately 722,000 net acres.
The company further enhanced its portfolio during the fourth quarter by closing an acreage exchange with TRP Energy, which bolstered its position in the southern Midland Basin.
As per the agreement announced in November, Diamondback exchanged certain assets in the Delaware Basin and paid $238 million in cash for TRP’s assets in the Midland Basin, which included about 15,000 net acres across Upton and Reagan counties in Texas, along with 55 undeveloped locations and 18 drilled but uncompleted wells (DUCs).
Diamondback has maintained strong momentum into 2025, recently announcing a cash-and-stock acquisition of the private equity-backed Double Eagle IV, valued at $4.1 billion.
The additional 400 drilling locations obtained from the Double Eagle acquisition are set to be seamlessly integrated into Diamondback’s upcoming drilling schedule, according to Stice.
For the full year of 2025, the company anticipates oil production to average between 485,000 and 498,000 barrels per day, with total production ranging from 883,000 to 909,000 barrels of oil equivalent per day.
Later this year, Stice is set to step down as CEO and transition to the role of executive chairman of the board. Van’t Hof will succeed him as CEO and will also join the Diamondback board, effective at the 2025 annual shareholder meeting.
