Private equity (PE) firm Carlyle Group LP said Sept. 11 it would fund the development of Diamondback Energy Inc.'s (NASDAQ: FANG) oil and gas assets in the prolific Permian Basin of Texas.

A Carlyle fund and Diamondback will jointly invest $620 million to develop the assets in the San Pedro area of Pecos County, Texas, within the Southern Delaware Basin, the companies said.

Carlyle will invest up to 85% for the development program over five years and the PE firm's interests will largely revert to Diamondback after certain performance milestones are met.

Diamondback's shares were up 2.2% at $114.58 in morning trade.

Last month, Diamondback agreed to buy shale rival Energen Corp. (NYSE: EGN) in an all-stock deal valued at $9.2 billion, to get an expanded footprint in the Permian, the largest and fastest-growing oil field in the U.S.

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