Diamondback Energy Inc

8. EQUITY METHOD INVESTMENTS AND RELATED PARTY TRANSACTIONS

The Company considers its equity method investees to be related parties. At December 31, 2024 and 2023, the Company had the following significant equity method investments:

(1) On July 26, 2024, the Company acquired an additional 17.5% ownership interest in EPIC Crude Holdings, LP (“EPIC”), bringing the Company’s aggregate ownership interest to 27.5%.

(2) The WTG joint venture divested its subsidiary during the WTG Midstream Transaction in July 2024 as further discussed in Note 4—Acquisitions and Divestitures.

Income (loss) and distributions from the Company’s equity method investees were not material for the years ended December 31, 2024, 2023 or 2022.

The Company reviews its equity method investments to determine if a loss in value which is other than temporary has occurred when events indicate the carrying value of the investment may not be recoverable. If such a loss has occurred, the Company recognizes an impairment provision. No significant impairments were recorded for the Company’s equity method investments for the years ended December 31, 2024, 2023 or 2022. If economic challenges occur in future periods, it could result in circumstances requiring the Company to record potentially material impairment charges on its equity method investments.

Related Party Transactions—Deep Blue

In addition to the equity method investee activity reported above, the Company had other significant related party transactions with Deep Blue which at December 31, 2024 and 2023, include (i) contingent consideration and other post-close adjustments receivable from Deep Blue, (ii) accrued capital expenditures and other accrued payables related to a commitment to fund certain capital expenditures on projects that were in process at the time of the Deep Blue transaction, and (iii) lease operating expenses and capitalized expenses related to fees paid to Deep Blue under a 15-year dedication for its produced water and supply water within a 12-county area of mutual interest in the Midland Basin.

The following table presents the significant related party balances included in the consolidated balance sheets at December 31, 2024:

During the years ended December 31, 2024 and 2023, the Company also paid Deep Blue approximately $135 million and $35 million, respectively, for water services provided during the completion phase of wells. These costs were capitalized and are included in the caption “Oil and natural gas properties” on the consolidated balance sheet.

The following table presents the significant related party transactions included in the consolidated statements of operations for the year ended December 31, 2024: