Diamondback Energy Inc

8. RELATED PARTY TRANSACTIONS

Viper

During the first quarter of 2025, Viper deposited approximately $223 million of cash into escrow pursuant to an equity purchase agreement for the 2025 Drop Down (as defined and discussed in Note 17—Subsequent Events). Viper’s escrow deposit is reflected in the caption “Restricted cash” on the Company’s condensed consolidated balance sheet at March 31, 2025.

Deep Blue

On September 1, 2023, the Company closed on a joint venture agreement with Five Point Energy LLC to form Deep Blue Midland Basin LLC (“Deep Blue”), in which the Company owns 30% equity ownership interest. In addition to the Deep Blue transaction, the Company has other significant related party transactions with Deep Blue which include (i) certain accounts 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 condensed consolidated balance sheets at March 31, 2025 and December 31, 2024:

During the three months ended March 31, 2025 and 2024, the Company recorded approximately $47 million and $31 million, respectively, for water services provided by Deep Blue during the completion phase of wells. These costs were capitalized and are included in the caption “Oil and natural gas properties” on the condensed consolidated balance sheets.

The following table presents the significant related party transactions included in the condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024: