Diamondback Energy to Buy Mineral Interests in Midland County for ~$440M, Issues Operational Update

Diamondback Energy, Inc.(Nasdaq: FANG) ("Diamondback") today announced that it has entered into adefinitive agreement with an unrelated third party seller to purchase mineralinterests under approximately 15,000 gross (12,500 net) acres in MidlandCounty for approximately $440 million, subject to certain adjustments. Morethan half of these minerals are operated by Diamondback. The proposedtransaction is expected to close by the end of September 2013, subject tocompletion of due diligence and satisfaction of closing conditions.Diamondback intends to finance the acquisition with debt and cash on hand.OPERATIONS UPDATEDiamondback's first operated Andrews County horizontal well, UL III 4-1H,produced at a peak IP rate of 613 boe/d (85% oil) from a 4,051 foot lateraland has averaged 585 boe/d over the last seven days, on submersible pump. Mr.Stice added, "I am excited about the early success of our first operatedAndrews County horizontal well. We believe this is the northern most test ofthe horizontal Wolfcamp "B" completed to date, and the success of this well isencouraging not only for this lease but is also a positive data point for ourrecently announced pending acquisitions in Martin and Dawson Counties. Thiswell was drilled in the Wolfcamp "B" with a short lateral due to leasegeometry and completed for just over $6 million. When normalized to a 7,500foot lateral, which is how we compare results across the basin, our testresults equate to almost 1,100 boe/d."Diamondback recently completed its second horizontal well in Andrews County, a7,540 foot lateral targeting the Clearfork, and flowback operations areunderway.Pro forma production for July 2013, after giving effect to our pendingacquisitions in Martin and Dawson Counties, was 8.0 Mboe/d. Near record heathas impacted electrical reliability on electric submersible pump operationsand offset wells have been shut in prior to frac operations. While theseevents have impacted production, there are seven wells currently in the earlystages of completion or flowback. These wells are expected to add significantvolumes by the end of the quarter.Wexford Capital LP served in an advisory capacity to Diamondback managementduring negotiations of this transaction. In conjunction with this release, Diamondback has added supplemental slides totheir website at DiamondbackEnergy.com.