Diamondback Eyes Natural Gas to Generate Power in Oil Patch

image is BloomburgMedia_SJYZ7QT0G1KW00_18-09-2024_12-56-56_638622144000000000.jpg

A Diamondback Energy Inc. oil rig in Midland, Texas.

Diamondback Energy Inc., one of the Permian Basin’s biggest oil companies, is considering using some of the natural gas it produces to generate electricity to run drilling and fracking operations.

Permian producers have increasingly shifted operations from diesel generators to electricity supplied by the local power grid. But the Texas grid can be unreliable at times, especially in remote parts of the oil patch.

“Texas is in a bind,” Diamondback Chief Executive Officer Travis Stice said Tuesday at the Pickering Energy Partners investor conference in Austin. “What we’re trying to think about is how can we solve some of the electrification demands that our investors have placed on us.” 

The Midland, Texas-based company, which recently finalized its acquisition of Endeavor Energy, has also signed a nonbinding letter of intent with nuclear power developer Oklo Inc. to deploy small reactors for some of its future electricity needs.

When asked if Diamondback was interested in developing its own gas-fired power plants, Stice demurred. 

“I don’t think you’d ever see Diamondback saying, ‘OK, we’re going to go build one,’ ” he said. “But is it possible we participate with our balance sheet in some of these investments?”

©2024 Bloomberg L.P.

By David Wethe

KEEPING THE ENERGY INDUSTRY CONNECTED

Subscribe to our newsletter and get the best of Energy Connects directly to your inbox each week.

By subscribing, you agree to the processing of your personal data by dmg events as described in the Privacy Policy.

Back To Top