Crude Oil and Natural Gas Gathering and Transportation

We own crude oil and natural gas gathering systems that cover hundreds of miles in Diamondback’s core operating areas. Our Acreage Dedication along with our commercial agreements and operating footprint will allow us to capture the majority of the incremental oil and gas production volumes associated with Diamondback’s horizontal drilling program. As of December 31, 2020, excluding the assets of our joint ventures, our crude oil and natural gas gathering system covers approximately 309 miles, consisting of (i) 154 miles of crude oil pipelines, which have 275,000 Bbl/d of crude oil throughput capacity and 118,000 Bbl of crude oil storage, and (ii) 155 miles of natural gas pipelines, which have 170,000 Mcf/d of natural gas gathering capacity and 151,000 Mcf/d of natural gas compression capability. Our crude oil and natural gas gathering and transportation system is purpose built with firm capacity on intermediary pipelines providing connections to long-haul pipelines that terminate on the Texas Gulf Coast. Our crude oil and natural gas gathered volumes, excluding volumes gathered by our joint ventures, averaged 112.0 MBoe/d for the year ended December 31, 2020.

Produced Water Gathering & Disposal

Crude oil and natural gas cannot be produced without significant produced water transport and disposal capacity given the high water volumes produced alongside the hydrocarbons. At the well site, crude oil and produced water are separated to extract the crude oil for sale and the produced water for proper disposal and recycling. We own strategically located produced water gathering pipeline systems spanning a total of 517 miles that connect the overwhelming majority of Diamondback operated crude oil and natural gas wells to our produced water disposal well sites. As of December 31, 2020, we have a total of 135 produced water disposal wells with an aggregate capacity of 3.1 MMBbl/d located across the Midland and Delaware Basins. Diamondback has instituted a program in its operations to use treated water for completion operations, and 19% of the sourced water volumes sold to Diamondback were recycled produced water during the year ended December 31, 2020. We have and expect to continue to realize increased margins for produced water disposal as a result of this recycling program.

Sourced Water Gathering

Our water sourcing and distribution system, with storage capacity of 58 MMBbl, is critical to Diamondback’s completion operations, and distributes water from sourced water wells from the Capitan Reef formation, Edwards-Trinity, Pecos Alluvium and Rustler aquifers in the Permian. Our sourced water system consists of a combination of permanent buried pipelines, portable surface pipelines and sourced water storage facilities, as well as pumping stations to transport the sourced water throughout the pipeline network. Having access to water sources is an important element of the hydraulic fracturing process in the Delaware Basin because modern completion methods require significantly more sourced water relative to the Midland Basin.