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☒			ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐			TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934

DE

83-1404608

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification Number)

500 West Texas

Suite 1200

Midland,

TX

79701

(Address of principal executive offices)

(Zip code)

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Units

RTLR

The Nasdaq Stock Market LLC

(NASDAQ Global Select Market)

Securities registered pursuant to section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  ☒ 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  ☒ 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒     No  ☐ 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  ☒     No  ☐ 

Large Accelerated Filer

☐

Accelerated Filer

☒

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☒

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒ 

			Page
Glossary of Oil and Natural Gas Terms			ii
Glossary of Certain Other Terms			iii
Cautionary Statement Regarding Forward-Looking Statements			iv
PART I
Items 1 and 2. Business and Properties			1
Item 1A. Risk Factors			15
Item 1B. Unresolved Staff Comments			29
Item 3. Legal Proceedings			29
Item 4. Mine Safety Disclosures			29
PART II
Item 5. Market for Registrant's Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities			30
Item 6. Selected Financial Data			30
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations			30
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			40
Item 8. Financial Statements and Supplementary Data			41
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			41
Item 9A. Controls and Procedures			41
Item 9B. Other Information			42
PART III
Item 10. Directors, Executive Officers and Corporate Governance			43
Item 11. Executive Compensation			47
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters			51
Item 13. Certain Relationships and Related Transactions, and Director Independence			55
Item 14. Principal Accountant Fees and Services			57
PART IV
Item 15. Exhibits and Financial Statement Schedules			59
Item 16. Form 10-K Summary			61
Signatures			S-1

The following is a glossary of certain oil and natural gas industry terms used in this Annual Report on Form 10-K (this “Annual Report” or this “report”):

Basin			A large depression on the earth’s surface in which sediments accumulate.
Bbl or barrel			One stock tank barrel, or 42 U.S. gallons liquid volume, used in reference to crude oil, natural gas liquids or other liquid hydrocarbons.
Bbl/d			Bbl per day.
British thermal unit or Btu			The quantity of heat required to raise the temperature of one pound of water by one degree Fahrenheit.
Completion			The process of treating a drilled well, followed by the installation of permanent equipment for the production of natural gas or oil or, in the case of a dry hole, the reporting of abandonment to the appropriate agency.
Condensate			Liquid hydrocarbons associated with production that is primarily natural gas.
Crude oil			Liquid hydrocarbons found in the earth, which may be refined into fuel sources.
Dry hole			A well found to be incapable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of such production exceed production expenses and taxes.
Field			The general area encompassed by one or more crude oil or natural gas reservoirs or pools that are located on a single geologic feature, or that are otherwise closely related to such geologic feature (either structural or stratigraphic).
Gross acres or gross wells			The total acres or wells, as the case may be, in which a working interest is owned.
Horizontal drilling			A drilling technique used in certain formations where a well is drilled vertically to a certain depth and then drilled at a right angle with a specified interval.
Hydraulic fracturing			The process of creating and preserving a fracture or system of fractures in a reservoir rock, typically by injecting a fluid under pressure through a wellbore and into the targeted formation.
Hydrocarbon			An organic compound containing only carbon and hydrogen.
MBbl			One thousand barrels.
MBbl/d			One thousand barrels per day.
MMcf			One million cubic feet of natural gas.
MMcf/d			One million cubic feet of natural gas per day.
MMBbl			One million barrels.
MMBbl/d			One million barrels per day.
MMBtu			One million British thermal units.
MMBtu/d			One million British thermal units per day.
Natural gas			Hydrocarbon gas found in the earth, composed of methane, ethane, butane, propane and other gases.
NGL			Natural gas liquids; the combination of ethane, propane, butane and natural gasolines that, when removed from natural gas, becomes liquid under various levels of higher pressure and lower temperature.
Operator			The individual or company responsible for the exploration and/or production of a crude oil or natural gas well or lease.
Reserves			Estimated remaining quantities of crude oil and natural gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering crude oil and natural gas or related substances to the market and all permits and financing required to implement the project. Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir (i.e., potentially recoverable resources from undiscovered accumulations).
Throughput			The volume of product transported or passing through a pipeline, plant, terminal or other facility.

Tight formation			A formation with low permeability that produces natural gas with very low flow rates for long periods of time.
Working interest			An operating interest that gives the owner the right to drill, produce and conduct operating activities on the property and receive a share of production and requires the owner to pay a share of the costs of drilling and production operations.

The following is a glossary of certain other terms used in this report:

ASU			Accounting Standards Update.
ASC			Accounting Standards Codification.
Delaware Act			Delaware Revised Uniform Limited Partnership Act.
Diamondback			Diamondback Energy, Inc., a Delaware corporation, and its subsidiaries other than the Partnership and its subsidiaries (including the Operating Company).
DOT			The U.S. Department of Transportation.
EPA			U.S. Environmental Protection Agency.
Exchange Act			The Securities Exchange Act of 1934, as amended.
FASB			Financial Accounting Standards Board.
FERC			Federal Energy Regulatory Commission.
GAAP			Accounting principles generally accepted in the United States.
General Partner			Rattler Midstream GP LLC, a Delaware limited liability company; the General Partner of the Partnership and a wholly owned subsidiary of Diamondback.
GHG			Greenhouse gases.
Holding Company			Rattler Holdings LLC, a wholly owned subsidiary of Rattler.
IPO			The Partnership’s initial public offering.
LIBOR			The London interbank offered rate.
LTIP			Rattler Midstream LP Long Term Incentive Plan.
Nasdaq			The Nasdaq Global Select Market.
Notes			The $500.0 million in aggregate principal amount of 5.625% Senior Notes due 2025 issued on July 14, 2020.
Operating Company			Rattler Midstream Operating LLC, a Delaware limited liability company and a consolidated subsidiary of the Partnership.
OPEC			The Organization of the Petroleum Exporting Countries.
OSHA			Federal Occupational Safety and Health Act.
Partnership			Rattler Midstream LP, a Delaware limited partnership.
Partnership agreement			The first amended and restated agreement of limited partnership of Rattler Midstream LP, dated May 28, 2019.
Predecessor			The Operating Company, prior to May 28, 2019 for accounting purposes.
RRC			The Railroad Commission of Texas.
SEC			Securities and Exchange Commission.
Securities Act			The Securities Act of 1933, as amended.

•Diamondback’s ability to meet its drilling and development plans on a timely basis or at all;

•changes in supply and demand levels for oil, natural gas, and natural gas liquids, and the resulting impact on the price for those commodities;

•the impact of public health crises, including epidemic or pandemic diseases such as the COVID-19 pandemic, and any related company or government policies or actions;

•actions taken by the members of OPEC and Russia affecting the production and pricing of oil, as well as other domestic and global political, economic, or diplomatic developments;

•changes in general economic, business or industry conditions, including changes in foreign currency exchange rates, interest rates, and inflation rates;

•regional supply and demand factors, including delays, curtailment delays or interruptions of production, or governmental orders, rules or regulations that impose production limits;

•federal and state legislative and regulatory initiatives relating to hydraulic fracturing, including the effect of existing and future laws and governmental regulations;

•restrictions on the use of water, including limits on the use of produced water and a moratorium on new produced water well permits recently imposed by the RRC in an effort to control induced seismicity in the Permian Basin;

•significant declines in prices for oil, natural gas, or natural gas liquids, which could require recognition of significant impairment charges;

•changes in U.S. energy, environmental, monetary and trade policies;

•conditions in the capital, financial and credit markets, including the availability and pricing of capital for drilling and development operations and our environmental and social responsibility projects;

•challenges with employee retention and an increasingly competitive labor market due to a sustained labor shortage or increased turnover caused by the COVID-19 pandemic;

•changes in the demand for and costs of conducting midstream infrastructure services;

•changes in safety, health, environmental, tax, and other regulations or requirements (including those addressing air emissions, water management, or the impact of global climate change);

•security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, or from breaches of information technology systems of third parties with whom we transact business;

•our ability to identify, complete and effectively integrate acquisitions into our operations;

•our ability to achieve anticipated synergies, system optionality and accretion associated with acquisitions;

•the results of our investments in joint ventures;

•the conditions impacting the timing and amount of common units repurchased under our common unit repurchase program;

•severe weather conditions;

•acts of war or terrorist acts and the governmental or military response thereto;

•defaults by Diamondback under our commercial agreements;

•changes in the financial strength of counterparties to our credit agreement;

•changes in our credit rating; and

•the risk factors discussed in Item 1A of Part I of this Annual Report on Form 10-K.

See Note 4—Acquisitions and Divestitures and Note 16—Subsequent Events included in the notes to the consolidated financial statements included elsewhere in this Annual Report for further discussion of these transactions.

Pipeline Infrastructure Assets
(miles)(1)			Delaware Basin						Midland Basin						Permian Total
Crude oil			113						46						159
Produced water			273						310						583
Sourced water			27						97						124
Total			413						453						866

(capacity/capability)(1)			Delaware Basin						Midland Basin						Permian Total						Utilization
Crude oil gathering (Bbl/d)			240,000						65,000						305,000						27		%
Produced water gathering and disposal (Bbl/d)			1,330,000						2,134,000						3,464,000						24		%
Sourced water gathering (Bbl/d)			120,000						544,000						664,000						43		%

(1)Does not include any assets of our equity method investment joint ventures.

			Year Ended December 31,
(throughput)(1)			2021						2020						2019
Crude oil gathering (Bbl/d)			79,071						92,056						85,164
Natural gas gathering (MMBtu/d)			112,130						121,637						85,283
Produced water gathering and disposal (Bbl/d)			783,259						821,543						806,078
Sourced water gathering (Bbl/d)			268,259						253,907						415,939

(1)Does not include any volumes from our equity method investment joint ventures.

•Serve as a significant provider of midstream services for Diamondback. Pursuant to the Acreage Dedications, we will continue to provide sourced water handling and gathering, produced water handling and disposal and crude oil transportation and gathering services for Diamondback until 2034, and extended thereafter on a yearly basis unless terminated by a party. We expect that Diamondback’s development of its core areas, and therefore its need for midstream services, will continue on the Acreage Dedications and we intend to utilize this relationship with Diamondback to drive free cash flow. Significant past investment in building or acquiring our midstream assets will allow us to support Diamondback’s expected production volumes, even as our expected operating capital expenditures decline.

•Focus on cash flow generation to fund our capital plan, support our distribution policy and maximize unitholder returns. Our operations are underpinned by high-margin, stable cash flow as a result of our long-term, fixed-fee contracts with Diamondback. In addition, other than our equity commitments in connection with our joint ventures, all of which are at or near their full length and capacity and should have minimal capital contributions going forward, we expect to have low future operating capital expenditure requirements, which will allow us to generate free cash flow and make distribution payments to our common unitholders while limiting our reliance on the capital markets. A core component of our strategy is to maximize free cash flow while maintaining a conservative debt to equity ratio.

•Emphasize providing midstream services under long-term, fixed-fee contracts to avoid direct commodity price exposure, mitigate volatility and enhance stability of our cash flow. Our commercial agreements with Diamondback are structured as long-term, fixed-fee contracts, which mitigates our direct exposure to commodity prices and enhances stability and predictability of our cash flow. We intend to pursue future opportunities that primarily utilize fixed-fee structures to insulate our cash flow from direct commodity price exposure.

•Fundamental, strategic relationship with Diamondback. We believe our assets are integral to Diamondback’s strategy and we believe the fundamental role we play in Diamondback’s operational success allows us to capitalize on Diamondback’s expected Permian production. We plan to build our midstream infrastructure in concert with and in advance of Diamondback’s expected production in order to allow Diamondback the operational flexibility to execute on its development plan. Our visibility into Diamondback’s drilling and production plans allows us to utilize a synchronized midstream development plan that optimizes capital spending and free cash flow generation.

•Experienced management team with an extensive track record of value creation. The management team of our General Partner consists of executives from Diamondback and we believe their significant experience, successful track record and discipline in deploying capital at Diamondback distinguishes us from our peers and helps us deliver attractive unitholder returns.

•Asset base located in the core of the Permian with highly visible underlying production. Our asset base is located in what we believe is the core of the Midland and Delaware Basins of the Permian and overlays Diamondback’s core development areas. These areas are characterized by high return single well economics that we believe are among the best in the Lower 48 and have a deep inventory of economic horizontal drilling locations. The close proximity of our assets to other leading exploration and production operators provide additional opportunities to execute third party contracts for midstream services.

•Structural and strategic alignment with unitholders. We are focused on creating differentiated unitholder value and providing strong return on and return of capital to unitholders. Through its ownership of Class B and common units in us and its ownership of membership interests in the Operating Company, Diamondback directly benefits if we grow free cash flow and distributions. We do not have incentive distribution rights or subordinated units, which we believe better aligns the interests of our unitholders with those of Diamondback. Additionally, we are structured as a partnership that elected to be treated as a corporation for tax purposes, which we believe increases stability and creates a more liquid trading market for our common units, given our access to a potentially broader unitholder base. We believe the preceding is a differentiator in the public midstream sector and provides the optimal platform to pursue a balanced plan for value creation that benefits all unitholders equally.

•High-margin business that generates significant, predictable free cash flow. Our revenue is generated as a result of our fee-based commercial agreements with Diamondback, which are based upon the prevailing market rates at the time of execution with annual escalators (subject to potential adjustment by regulators). We believe such agreements provide exposure to Diamondback’s production with no direct commodity price exposure, thus enhancing the predictability of free cash flow and our performance. We believe the current capacity of our assets should result in minimal incremental operating capital expenditures to meet Diamondback’s anticipated production volumes, and will result in significant long-term free cash flow generation that supports a self-funding model for our core business and the return of capital to unitholders through a distribution.

•Financial flexibility and conservative capital structure. We have a conservative capital structure that we believe provides us with the financial flexibility to execute our business strategies. As of December 31, 2021, we had $425 million of liquidity, including $405 million of available borrowings under our credit agreement, and a debt to equity ratio of approximately 0.7 to 1.0. We believe that our significant liquidity and strong capital structure allows us to execute our strategy while limiting our reliance on the capital markets.

•requiring the acquisition of permits to conduct regulated activities;

•restricting the way we can handle or dispose of our materials or wastes;

•limiting or prohibiting construction, expansion, modification and operational activities based on National Ambient Air Quality Standards, or NAAQS, and in sensitive areas, such as wetlands, coastal regions, seismically sensitive areas, or areas inhabited by endangered species;

•requiring remedial action to mitigate pollution conditions caused by our operations or attributable to former operations;

•enjoining, or compelling changes to, the operations of facilities deemed not to be in compliance with permits issued pursuant to such environmental laws and regulations; and

•requiring noise, lighting, visual impact, odor or dust mitigation, setbacks, landscaping, fencing and other measures; and limiting or restricting water use.

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports are available free of charge on the Investor Relations page of our website at www.rattlermidstream.com as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Information contained on, or connected to, our website is not incorporated by reference into this Annual Report and should not be considered part of this or any other report that we file with or furnish to the SEC.

When acquiring oil and natural gas leases, Diamondback may not elect to incur the expense of retaining lawyers to examine the title to the mineral interest. Rather, Diamondback may rely upon the judgment of oil and gas lease brokers or landmen who perform the fieldwork in examining records in the appropriate governmental office before attempting to acquire a lease in a specific mineral interest. The existence of a material title deficiency can render a lease worthless. If Diamondback fails to cure any title defects, it may be delayed or prevented from utilizing the associated mineral interest which could result in a decrease in the volumes on our systems and an associated decrease in our revenues.

We may not own in fee the land on which our pipelines and facilities are located, which could result in disruptions to our operations.

We, Diamondback or any third party customers may incur significant liability under, or costs and expenditures to comply with, a broad range of federal, state and local regulations, including those relating to environmental, commerce, transportation and health and safety matters, which are complex and subject to frequent change. We are subject to regulation by multiple governmental agencies, which could adversely impact our business, financial condition and results of operations.

As an owner and operator of gathering systems, we are directly or indirectly subject to regulation by multiple federal, state and local governmental agencies. Risks and uncertainties related to such regulation include:

•The historic trend of more expansive and stricter environmental laws and regulations, including those related to GHGs and climate change, air quality, water quality, the storage, treatment and disposal of waste, including produced water, protection of endangered or threatened species, and the remediation of contaminated soil and groundwater, may continue in the long-term potentially resulting in increased costs of doing business;

•The rates charged for gathering service over our regulated crude oil assets are subject to review and reporting by FERC and the RRC, which could adversely affect our revenues;

•A change by FERC in policy or the jurisdictional characterization of some of our assets may result in increased regulation of our assets, which may cause our operating expenses to increase, limit the rates we charge for certain services and decrease the amount of cash we have available for distribution;

•Federal and state legislative and regulatory initiatives relating to pipeline safety that require the use of new or more stringent safety controls or result in more stringent enforcement of applicable legal requirements could subject us to increased capital costs, operational delays and costs of operation;

•Increased regulation of hydraulic fracturing could result in reductions or delays in crude oil and natural gas production by Diamondback and our other customers, which could reduce the throughput on our gathering and other midstream systems, which could adversely impact our revenues;

•Federal and state legislative and regulatory initiatives intended to address seismic activity could restrict our ability to dispose of produced water gathered from Diamondback and our other customers, which could have a material adverse effect on our business;

•Climate change laws and regulations restricting emissions of GHGs could result in increased operating costs and reduced demand for the crude oil that we gather while potential physical effects of climate change could disrupt Diamondback’s and our other customers’ production and cause us to incur significant costs in preparing for or responding to those effects; and

•Certain plant or animal species are or could be designated as endangered or threatened, which could have a material impact on our and Diamondback’s operations.

If we are deemed an “investment company” under the Investment Company Act of 1940, it could have a material adverse effect on our business and the price of our common units.

•our General Partner is allowed to take into account the interests of parties other than us, such as Diamondback, in exercising certain rights under our partnership agreement;

•Diamondback and other affiliates of our General Partner may compete with us as neither our partnership agreement nor any other agreement requires Diamondback to pursue a business strategy that favors us;

•our partnership agreement replaces the fiduciary duties that would otherwise be owed by our General Partner with contractual standards governing its duties;

•our partnership agreement limits our General Partner’s liabilities and restricts the remedies available to holders of our common units for actions taken by our General Partner that might otherwise constitute breaches of fiduciary duty;

•except in limited circumstances, our General Partner has the power and authority to conduct our business without unitholder approval;

•our General Partner determines the amount and timing of asset purchases and sales, borrowings, issuances of additional partnership securities and the level of cash reserves, each of which can affect the amount of cash that is distributed to our common unitholders;

•cost reimbursements, which are determined in our General Partner’s sole discretion, and fees due our General Partner and its affiliates for services provided may be substantial and will reduce the amount of cash we have available for distribution to our common unitholders;

•contracts between us, on the one hand, and our General Partner and its affiliates, on the other hand, will not be the result of arm’s-length negotiations;

•our partnership agreement does not restrict our General Partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with its affiliates on our behalf;

•our General Partner intends to limit its liability regarding our contractual and other obligations;

•common unitholders have no right to enforce the obligations of our General Partner and its affiliates under agreements with us; and

•our General Partner decides whether to retain separate counsel, accountants or others to perform services for us.

By purchasing a common unit, a unitholder is treated as having consented to the provisions in our partnership agreement, including being subject to the risks discussed above.

We are a Delaware limited partnership and have elected to be treated as a corporation for U.S. federal income tax purposes. As a result, we are subject to tax as a corporation at the corporate tax rate. While we expect to generate net operating losses or utilize net operating losses to offset a portion of our taxable income over the next several years, there is no guarantee that we will not have any taxable income as a result of our equity interests in the Operating Company. Because an entity-level tax is imposed on us due to our status as a corporation for U.S. federal income tax purposes, our distributable cash flow may be substantially reduced by our tax liabilities.

Distributions to common unitholders may be taxable as dividends.

Our common unit repurchase activity for the three months ended December 31, 2021 was as follows:

Period						Total Number of Units Purchased						Average Price Paid Per Unit (1)						Total Number of Units Purchased as Part of Publicly Announced Plan						Approximate Dollar Value of Units that May Yet Be Purchased Under the Plan (2)
						($ in thousands, except per unit amounts)
October 1, 2021 - October 31, 2021						156,480						$	11.92					156,480						$	104,768
November 1, 2021 - November 30, 2021						676,797						$	11.14					676,797						$	97,229
December 1, 2021 - December 31, 2021						872,200						$	10.96					872,200						$	87,668
Total						1,705,477						$	11.12					1,705,477

(1)The average price paid per common unit includes commissions paid to repurchase common units.

(2)In October 2020, the board of directors of our General Partner approved an initial common unit repurchase program to acquire up to $100.0 million of our outstanding common units through December 31, 2021. In October 2021, the repurchase program authorization was increased to $150.0 million and the program was extended indefinitely. This repurchase program may be suspended from time to time, modified, extended or discontinued by the board of directors of our General Partner at any time.

None.

The following discussion includes a comparison of our results of operations, including changes in our operating income, and liquidity and capital resources for fiscal years 2021 and 2020. A discussion of changes in our results of operations from fiscal year 2019 to fiscal year 2020 has been omitted from this report, but may be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 25, 2021 and incorporated by reference into this Annual Report.

See Note 4—Acquisitions and Divestitures and Note 16—Subsequent Events included in the notes to the consolidated financial statements included elsewhere in this Annual Report for further discussion of these transactions.

•average crude oil gathering volumes were 79,071 Bbl/d, a decrease of 14% year over year;

•average produced water gathering and disposal volumes were 783,259 Bbl/d, a decrease of 5% year over year; and

•average sourced water gathering volumes were 268,259 Bbl/d, an increase of 6% year over year.

(Miles)(1)			Delaware Basin						Midland Basin						Permian Total
Crude oil			113						46						159
Produced water			273						310						583
Sourced water			27						97						124
Total			413						453						866

(Capacity/capability)(1)			Delaware Basin						Midland Basin						Permian Total						Utilization
Crude oil gathering (Bbl/d)			240,000						65,000						305,000						27		%
Produced water gathering and disposal (Bbl/d)			1,330,000						2,134,000						3,464,000						24		%
Sourced water gathering (Bbl/d)			120,000						544,000						664,000						43		%

(1)Does not include any assets of our equity method investment joint ventures.

Results of Operations for the Year Ended December 31, 2021 and 2020

			Year Ended December 31,
			2021						2020
Operating Results:			(In thousands, except operating data)
Revenues:
Midstream revenues—related party			$	356,498					$	379,089
Midstream revenues—third party			26,893						31,124
Other revenues—related party			8,909						7,801
Other revenues—third party			4,041						5,891
Total revenues			396,341						423,905
Costs and expenses:
Direct operating expenses			102,925						131,393
Cost of goods sold (exclusive of depreciation and amortization)			43,470						38,370
Real estate operating expenses			2,231						2,361
Depreciation, amortization and accretion			49,196						53,123
Impairment and abandonments			3,371						918
General and administrative expenses			21,611						16,367
(Gain) loss on disposal of assets			4,956						(729)
Total costs and expenses			227,760						241,803
Income (loss) from operations			168,581						182,102
Other income (expense):
Interest income (expense), net			(32,080)						(17,287)
Gain (loss) on sale of equity method investments			23,020						—
Income (loss) from equity method investments			14,779						(9,881)
Total other income (expense), net			5,719						(27,168)
Net income (loss) before income taxes			174,300						154,934
Provision for (benefit from) income taxes			10,530						10,229
Net income (loss)			163,770						144,705
Less: Net income (loss) attributable to non-controlling interest			126,990						110,014
Net income (loss) attributable to Rattler Midstream LP			$	36,780					$	34,691
Operating Data:
Throughput(1)
Crude oil gathering (Bbl/d)			79,071						92,056
Natural gas gathering (MMBtu/d)			112,130						121,637
Produced water gathering and disposal (Bbl/d)			783,259						821,543
Sourced water gathering (Bbl/d)			268,259						253,907

Comparison of the Years Ended December 31, 2021 and 2020

See Note 3—Revenue from Contacts with Customers in the notes to the consolidated financial statements included elsewhere in this Annual Report for additional discussion of our revenues.

The gain of $23.0 million on sale of equity method investments in 2021 related to the sale of our interest in Amarillo Rattler. See Note 4—Acquisitions and Divestitures in the notes to the consolidated financial statements included elsewhere in this Annual Report for discussion of the sale.

Income from equity method investments was $14.8 million in 2021 compared to a loss of $9.9 million in 2020, primarily due to the 2020 period including a proportional charge of $15.8 million in goodwill impairment recorded by an investee. The remaining change primarily stemmed from the addition of $5.6 million in income from the WTG joint venture acquired in the fourth quarter of 2021, and a general recovery in the operations of our other equity method investments in 2021 after the oil and gas industry downturn due to the COVID-19 pandemic and other economic factors in 2020. See Note 7—Equity Method Investments in the notes to the consolidated financial statements included elsewhere in this Annual Report for additional discussion.

The following table presents our cash flows for the periods indicated:

			Year Ended December 31,
			2021						2020
			(In thousands)
Net cash provided by (used in) operating activities			$	248,100					$	229,899
Net cash provided by (used in) investing activities			(183,323)						(180,809)
Net cash provided by (used in) financing activities			(68,807)						(35,796)
Net increase (decrease) in cash			$	(4,030)					$	13,294

Net cash provided by operating activities increased by $18.2 million during the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily due to distributions representing returns on investment from our equity method investments of $34.7 million, a decrease in direct operating expenses of $28.5 million, and an $8.1 million fluctuation in working capital primarily due to the timing of when collections are made on accounts receivable and payments are made on accounts payable and accrued liabilities. These increases in cash flow were partially offset by a $27.6 million decline in revenues, an increase in cash paid for interest of $21.8 million, and less significant increases in cost of goods sold and cash general and administrative costs. See —Results of Operations for further discussion of changes in revenue, operating expenses and interest expense and Note 7—Equity Method Investments in the notes to the consolidated financial statements included elsewhere in this Annual Report for further discussion of distributions.

Net cash used in investing activities was $183.3 million for the year ended December 31, 2021 and consisted primarily of (i) a payment of $160.0 million for the Drop Down acquisition, (ii) contributions of $113.6 million to our equity method investments, including the initial investment in the WTG joint venture, and (iii) other capital expenditures of $32.2 million which primarily related to our produced water disposal assets, See —2021 Transactions and Recent Developments for additional discussion of these expenditures.

The Operating Company’s Revolving Credit Facility

The Operating Company’s credit agreement provides for a revolving credit facility in the maximum credit amount of $600.0 million, which is expandable to $1.0 billion upon our election, subject to obtaining additional lender commitments and satisfaction of customary conditions.

As of December 31, 2021, there was $195.0 million of outstanding borrowings under the Operating Company’s revolving credit facility. The weighted average interest rate on borrowings under the credit agreement was 1.41% for the year ended December 31, 2021. The revolving credit facility matures in 2024.

As of December 31, 2021, the Operating Company was in compliance and expects to be in compliance with all financial maintenance covenants under the credit agreement.

For additional information regarding the revolving credit facility and outstanding debt, see Note 8—Debt in the notes to the consolidated financial statements included elsewhere in this Annual Report.

			Ownership Interest						Acquisition Date						Cumulative Capital Contributions to Date						Anticipated Future Capital Commitment
															(In thousands)
EPIC Crude Holdings, LP			10		%				February 1, 2019						$	138,034					$	2,620
Gray Oak Pipeline, LLC			10		%				February 15, 2019						$	142,096					$	—
Wink to Webster Pipeline LLC			4		%				July 30, 2019						$	89,453					$	18,547
OMOG JV LLC			60		%				October 1, 2019						$	218,555					$	—
Remuda Midstream Holdings LLC			25		%				October 5, 2021						$	104,502					$	2,012
BANGL, LLC			10		%				January 19, 2022						$	22,150					$	5,000

See Note 7—Equity Method Investments and Note 16—Subsequent Events in the notes to the consolidated financial statements included elsewhere in this Annual Report for further discussion regarding our equity method investments.

As discussed in Note 15—Commitments and Contingencies in the notes to the consolidated financial statements included elsewhere in this Annual Report, the Partnership has a water services agreement for produced water disposal services through 2034. The aggregate remaining minimum commitment is $51.1 million, with approximately $4.6 million due in each of the years from 2022 through 2025, $3.7 million due in 2026 and the remainder due in the years thereafter.

In October 2021, the board of directors of our General Partner approved an increase of the authorization of our common unit repurchase program to $150.0 million of the Partnership’s outstanding common units and extended the program indefinitely. During the year ended December 31, 2021, we repurchased approximately $47.6 million of common units under the repurchase program. As of December 31, 2021, $87.7 million remained available for future repurchases of our common units under our program. See Note 10—Unitholders' Equity and Distributions in the notes to the consolidated financial statements included elsewhere in this Annual Report for further discussion of the common unit repurchase program.

Based on indicators present at December 31, 2021, we reviewed our investment in EPIC for impairment utilizing an estimate of fair value calculated in a discounted cash flow model in accordance with the income approach in ASC 820— Fair Value Measurement. The discounted cash flow model incorporates our expectations of EPIC’s future revenue, operating expenses, and non-operating expenses including debt service costs based on expected future debt levels, and discounts the projected cash flows to the current fair value using an estimated weighted average cost of capital at the date of valuation. The resulting fair value was below the current carrying value of the EPIC investment. However, based on our consideration of the factors noted above, among others, we determined the decline in fair value is temporary and, thus, no impairment expense was recorded at December 31, 2021. Key factors impacting our conclusion that the decline in fair value is temporary include forecasted increases in asset utilization based on published industry data, reported production increases by major producers transporting production on EPIC’s pipeline and a determination that EPIC will refinance its maturing debt obligations by 2026. Based on the subjectivity of the estimates included in the various scenarios of our fair value estimate, should our analysis of the factors above change in future periods, we could recognize an other than temporary impairment. The amount of future impairment, if any, will be based on updated assumptions at that time. If our estimate of fair value changes or if our conclusion regarding the temporary nature of any decline in fair value changes, it could have a material impact on our future consolidated financial statements and results of operations.

We are treated as a corporation for U.S. federal income tax purposes. The amount of income taxes we record requires interpretations of complex rules and regulations of federal, state, provincial and foreign tax jurisdictions.

See Note 2—Summary of Significant Accounting Policies in the notes to the consolidated financial statements included elsewhere in this Annual Report for a full listing of our significant accounting policies.

See Note 2—Summary of Significant Accounting Policies in the notes to the consolidated financial statements included elsewhere in this Annual Report for recent accounting pronouncements and accounting policies not yet adopted, if any.

We are exposed to market risk, including the effects of adverse changes in commodity prices and interest rates as described below. The primary objective of the following information is to provide quantitative and qualitative information about our potential exposure to market risks. The term “market risk” refers to the risk of loss arising from adverse changes in oil and natural gas prices and interest rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses.

We are subject to counterparty credit risk related to our midstream commercial contracts, lease agreements and joint venture receivables. We derive substantially all of our revenue from our commercial agreements with Diamondback. As a result, we are directly affected by changes to Diamondback’s business related to operational and business risks or otherwise. We cannot predict the extent to which Diamondback’s business would be impacted if conditions in the energy industry were to deteriorate, nor can we estimate the impact such conditions would have on Diamondback’s ability to execute its drilling and development program or to perform under our agreements. While we monitor the creditworthiness of purchasers, lessees and joint venture partners with which we conduct business, we are unable to predict sudden changes in solvency of these counterparties and may be exposed to associated risks. Non-performance by a counterparty could result in significant financial losses.

None.

Name			Age			Position With Our General Partner
Travis D. Stice			60			Chief Executive Officer and Director
Kaes Van't Hof			35			President and Director
Teresa L. Dick			52			Chief Financial Officer, Executive Vice President and Assistant Secretary
Matt Zmigrosky			43			Executive Vice President, General Counsel and Secretary
Steven E. West			61			Chairman of the Board
Laurie H. Argo			49			Director
Arturo Vivar			59			Director

Travis D. Stice. Mr. Stice has served as Chief Executive Officer and a director of our General Partner since July 2018. He has served as Chief Executive Officer of Diamondback since January 2012 and as a director since November 2012. Mr. Stice has also served as the Chief Executive Officer and a director of the general partner of Viper since February 2014. Prior to his current positions with our General Partner, Diamondback and Viper’s general partner, he served as Diamondback’s President and Chief Operating Officer from April 2011 to January 2012. From November 2010 to April 2011, Mr. Stice served as a Production Manager of Apache Corporation, an oil and gas exploration company. Mr. Stice served as a Vice President of Laredo Petroleum Holdings, Inc., an oil and gas exploration and production company, from September 2008 to September 2010 and as a Development Manager of ConocoPhillips/Burlington Resources Mid-Continent Business Unit, an oil and gas exploration company, from April 2006 until August 2008. Prior to that, Mr. Stice held a series of positions of increasing responsibilities at Burlington Resources, most recently as a General Manager, Engineering, Operations and Business Reporting of its Mid-Continent Division from January 2001 until Burlington Resources’ acquisition by ConocoPhillips in March 2006. He started his career with Mobil Oil in 1985. Mr. Stice has over 35 years of industry experience in production operations, reservoir engineering, production engineering and unconventional oil and gas exploration and over 20 years of management experience. Mr. Stice graduated from Texas A&M University with a Bachelor of Science degree in Petroleum Engineering. Mr. Stice is a registered engineer in the State of Texas, and is a 35-year member of the Society of Petroleum Engineers.

Kaes Van’t Hof. Mr. Van’t Hof has served as President and a director of our General Partner since July 2018. He has served as Diamondback’s Chief Financial Officer and Executive Vice President of Business Development since March 2019 after joining Diamondback in July 2016 as Vice President and serving as its Senior Vice President-Strategy and Corporate Development from February 2017 to February 2019. Mr. Van’t Hof has also served as the President of the general partner of

Teresa L. Dick. Ms. Dick has served as Chief Financial Officer, Executive Vice President and Assistant Secretary of our General Partner since July 2018. She has also served as Diamondback’s Executive Vice President and Chief Accounting Officer since March 2019. Ms. Dick served as Diamondback’s Executive Vice President and Chief Financial Officer from February 2017 to February 2019, as its Assistant Secretary since October 2012, as its Chief Financial Officer and Senior Vice President from November 2009 to February 2017 and as its Corporate Controller from November 2007 until November 2009. Ms. Dick has also served as Chief Financial Officer, Executive Vice President and Assistant Secretary of the General Partner of Viper since February 2017 and served as its Chief Financial Officer, Senior Vice President and Assistant Secretary from February 2014 to February 2017. From June 2006 to November 2007, Ms. Dick held a key management position as the Controller/Tax Director at Hiland Partners, a publicly-traded midstream energy MLP. Ms. Dick has over 20 years of accounting experience, including over eight years of public company experience in both audit and tax areas. Ms. Dick received her Bachelor of Business Administration degree in Accounting from the University of Northern Colorado. Ms. Dick is a certified public accountant and a member of the American Institute of CPAs and the Council of Petroleum Accountants Societies.

Matt Zmigrosky. Mr. Zmigrosky has served as Executive Vice President, General Counsel and Secretary of our General Partner since February 2019. Since February 2019, he has also served as Executive Vice President, General Counsel and Secretary of both Diamondback and the General Partner of Viper. Prior to joining Diamondback and Viper’s general partner, Mr. Zmigrosky was in the private practice of law for over 15 years. From October 2012 until January 2019, Mr. Zmigrosky was a partner at Akin Gump Strauss Hauer & Feld LLP, an international law firm, where he worked extensively with Diamondback and its subsidiaries. Mr. Zmigrosky received a Bachelor of Science in Management degree in finance from Tulane University and a Juris Doctorate degree from Southern Methodist University Dedman School of Law.

Steven E. West. Mr. West has served as the Chairman of the Board of our General Partner since May 2019, and as a director and Chairman of the General Partner of Viper since February 2014. Mr. West has also served as a director of Diamondback since December 2011 and as its Chairman of the Board since October 2012. He served as Diamondback’s Chief Executive Officer from January 2009 to December 2011. From January 2011 until December 2016, Mr. West was a partner at Wexford Capital LP, focusing on Wexford’s private equity energy investments. From August 2006 until December 2010, Mr. West served as senior portfolio advisor at Wexford. From August 2003 until August 2006, he was the Chief Financial Officer of Sunterra Corporation, a former Wexford portfolio company. From December 1993 until July 2003, Mr. West held senior financial positions at Coast Asset Management and IndyMac Bank. Prior to that, he worked at First Nationwide Bank, Lehman Brothers and Peat Marwick Mitchell & Co., the predecessor of KPMG LLP. Mr. West earned a Bachelor of Science degree in Accounting from California State University, Chico.

Laurie H. Argo. Ms. Argo is a director of our General Partner and member of the audit and conflicts committee. Ms. Argo served as a director and member of the audit committee of EVRAZ plc, a multinational, vertically integrated steel making and mining company from August 2018 through June 2021, with additional compensation and stakeholder engagement committee memberships from 2020-2021. From January 2015 until September 2017, Ms. Argo served as Senior Vice President of Enterprise Products Holdings LLC, the general partner of Enterprise Products Partners L.P., a midstream natural gas and crude oil pipeline company. From January 2014 to January 2015, Ms. Argo was Vice President, NGL Fractionation, Storage and Unregulated Pipelines of Enterprise Products Partners L.P. From October 2014 to February 2015, Ms. Argo was President and Chief Executive Officer of OTLP GP, LLC, the general partner of Oiltanking Partners, L.P. and an affiliate of Enterprise Products Partners L.P. From 2005 to January 2014, Ms. Argo held various positions in the NGL and Natural Gas Processing

Arturo Vivar. Mr. Vivar is a director of our General Partner. Mr. Vivar has served as the Chief Executive Officer of Monterra Energy Holdings LLC, a midstream development company, since December 2014. Mr. Vivar was also a founder and served as the Chief Financial Officer of Rangeland Energy, LLC, a midstream development company, from November 2009 to March 2013. Prior to that, Mr. Vivar served as the Vice President of Business Development at WesPac Energy, LLC from July 2004 to February 2009, where he focused on developing energy infrastructure, hedging and risk management. Mr. Vivar has more than 30 years of experience in the energy industry. Mr. Vivar received his Bachelor of Science degree in Civil Engineering from Cal Polytechnic University and earned his Master of Business Administration degree from Stanford University.

The audit committee assists the board of directors in its oversight of the integrity of our financial statements and our compliance with legal and regulatory requirements and partnership policies and controls. The audit committee has the sole authority to retain and terminate our independent registered public accounting firm, approve all auditing services and related fees and the terms thereof performed by our independent registered public accounting firm, and pre-approve any non-audit services and tax services to be rendered by our independent registered public accounting firm. The audit committee is also responsible for confirming the independence and objectivity of our independent registered public accounting firm. Our independent registered public accounting firm is given unrestricted access to the audit committee and our management, as necessary. The audit committee has adopted a charter, which is available on our website under the “corporate governance” section at https://www.rattlermidstream.com/investor-relations.

The board of directors of our General Partner has adopted a Code of Business Conduct and Ethics, or Code of Ethics, that applies to all employees, including executive officers, and directors of our General Partner. Amendments to or waivers from the Code of Ethics will be disclosed on our website. We have also made the Code of Ethics available on our website under the “Corporate Governance” section at https://www.rattlermidstream.com/investor-relations.

The Board of Directors of Rattler Midstream GP LLC
Travis D. Stice
Kaes Van't Hof
Steven E. West
Laurie H. Argo
Arturo Vivar

Name			Fees Earned or Paid in cash(a)			Unit Awards(b)			Total
Steven E. West(c)(d)			$	75,000		99,965			$	174,965
Laurie H. Argo(c)(d)			$	75,000		99,965			$	174,965
Arturo Vivar(c)(d)			$	75,000		99,965			$	174,965

(a)This column reflects the value of a director’s annual retainer.

(b)The amount in this column represents the aggregate grant date fair value of phantom units granted in the fiscal year calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Compensation - Stock Compensation.” Distribution equivalent rights are not reflected in the aggregate grant date fair value of phantom unit awards.

(c)Each of Ms. Argo and Messrs. West and Vivar received a grant of 11,011 phantom units on July 10, 2020, which vested and settled on July 10, 2021, pursuant to the LTIP, with each unit having a grant date fair value of $8.23. Each phantom unit is the economic equivalent of one of our common units.

(d)Each of Ms. Argo and Messrs. West and Vivar received a grant of 9,256 phantom units on July 12, 2021, which will vest and settle on July 12, 2022, pursuant to the LTIP, with each unit having a grant date fair value of $10.80. Each phantom unit is the economic equivalent of one of our common units.

Messrs. Stice and Van’t Hof are directors of our General Partner, and are also executive officers of our General Partner and employees of Diamondback E&P LLC. Messrs. Stice and Van’t Hof have received awards pursuant to the LTIP for their service as executive officers or employees, respectively, and unrelated to their service as directors of our General Partner. These awards are reflected in the tables contained in Diamondback’s 2022 proxy statement under the heading “Compensation Discussion and Analysis.”

•our General Partner;

•each of our General Partner’s directors and executive officers; and

•all of our General Partner’s directors and executive officers as a group.

Name of Beneficial Owner

Common Units Beneficially Owned(1)

Percentage of Common Units Beneficially Owned

Rattler Midstream GP LLC

—

—

Travis D. Stice(2)

118,419

*

Kaes Van’t Hof(3)

268,256

*

Teresa L. Dick(4)

20,749

*

Matt Zmigrosky(5)

8,568

*

Laurie H. Argo(6)

17,225

*

Arturo Vivar(6)

30,975

*

Steven E. West(6)

27,100

*

All directors and executive officers of our General Partner as a group (7 persons)

491,292

*

*    Less than 1%

(1)Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. In computing percentage ownership of each person, (i) common units subject to options held by that person that are exercisable as of January 31, 2022 and (ii) common units subject to options or phantom units held by that person that are exercisable or vesting within 60 days of January 31, 2022 are all deemed to be beneficially owned. These common units, however, are not deemed outstanding for the purpose of computing the percentage ownership of each other person. The percentage of common units beneficially owned is based on 38,139,805 common units outstanding as of January 31, 2022. Unless otherwise indicated, all amounts exclude common units issuable upon the exercise of outstanding options and vesting of phantom units that are not exercisable and/or vested as of January 31, 2022 or within 60 days of January 31, 2022. Unless otherwise noted, the address for each beneficial owner listed below is 500 West Texas Avenue, Suite 1200, Midland, Texas 79701. Except as noted, each unitholder in the above table is believed to have sole voting and sole investment power with respect to the units beneficially held.

(2)All of these units are held by Stice Investments, Ltd., which is managed by Stice Management, LLC, its general partner. Mr. Stice and his spouse hold 100% of the membership interests in Stice Management, LLC, of which Mr. Stice is the manager. Excludes 68,572 phantom units, that are scheduled to vest in three remaining equal installments beginning on May 28, 2022.

(3)Excludes 685,715 phantom units, that are scheduled to vest in three equal installments beginning on May 28, 2022.

(4)Excludes 34,286 phantom units, that are scheduled to vest in three equal installments beginning on May 28, 2022.

(5)Excludes 13,715 phantom units, that are scheduled to vest in three equal installments beginning on May 28, 2022.

(6)Excludes 9,256 phantom units, that are scheduled to vest on July 12, 2022.

Shares of Diamondback Common Stock Beneficially Owned(1)

Name of Beneficial Owner

Amount and Nature of Beneficial Ownership

Percentage of Class

Travis D. Stice(2)

403,324

*

Kaes Van’t Hof(3)

45,615

*

Teresa L. Dick(4)

49,535

*

Matt Zmigrosky(5)

14,175

*

Laurie H. Argo

—

—

Arturo Vivar

—

—

Steven E. West(6)

3,756

*

All directors and executive officers as a group (7 persons)

516,405

*

*    Less than 1%.

(1)Beneficial ownership is determined in accordance with SEC rules. In computing percentage ownership of each person, (i) shares of common stock subject to options held by that person that are exercisable as of January 31, 2022 and (ii) shares of common stock subject to options or restricted stock units held by that person that are exercisable or vesting within 60 days of January 31, 2022, are all deemed to be beneficially owned. These shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of each other person. The percentage of shares beneficially owned is based on 177,412,057 shares of common stock outstanding as of January 31, 2022. Unless otherwise indicated, all amounts exclude shares issuable upon the exercise of outstanding options and vesting of restricted stock units that are not exercisable and/or vested as of January 31, 2022 or within 60 days of January 31, 2022. Except as noted, each stockholder in the above table is believed to have sole voting and sole investment power with respect to the shares of common stock beneficially held.

(2)All of these shares are held by Stice Investments, Ltd., which is managed by Stice Management, LLC, its general partner. Mr. Stice and his spouse hold 100% of the membership interests in Stice Management, LLC, of which Mr. Stice is the manager. Includes 26,325 restricted stock units, that are scheduled to vest on March 1, 2022. Excludes 11,499 restricted stock units, that are scheduled to vest on March 1, 2023. Also excludes (i) 49,436 performance-based restricted stock units awarded on March 1, 2019, that vested effective December 31, 2021 (representing 100% vesting of the originally reported amount) based upon final determination upon certification of certain stockholder return performance conditions relative to Diamondback’s peer group during the three-year performance period ended on December 31, 2021 by Diamondback’s compensation committee, (ii) 66,714 performance-based restricted stock units awarded to Mr. Stice on March 1, 2020, which are subject to the satisfaction of certain stockholder return performance conditions relative to Diamondback’s peer group during the three-year performance period ending on December 31, 2022 and (iii) 51,748 performance-based restricted stock units awarded to Mr. Stice on March 1, 2021, which are subject to the satisfaction of certain stockholder return performance conditions relative to Diamondback’s peer group during the three-year performance period ending on December 31, 2023.

(3)Includes 12,955 restricted stock units, that are scheduled to vest on March 1, 2022. Excludes (i) 6,038 restricted stock units, that are scheduled to vest on March 1, 2023, (ii) 8,790 restricted stock units, that are scheduled to vest in five equal annual installments beginning on March 1, 2025, (iii) 23,070 performance-based restricted stock units awarded on March 1, 2019, that vested effective December 31, 2021 (representing 100% vesting of the originally reported amount) based upon final determination upon certification of certain stockholder return performance conditions relative to Diamondback’s peer group during the three-year performance period ended on December 31, 2021 by Diamondback’s compensation committee, (iv) 13,183 performance-based restricted stock units awarded to Mr. Van’t Hof on March 1, 2019 (representing 100% vesting of the originally reported amount) based upon final determination upon certification of certain stockholders return performance conditions relative to Diamondback’s peer group during the three-year performance period ended on December 31, 2021, that are scheduled to vest in five equal installments beginning on March 1, 2025, (v) 31,133 performance-based restricted stock units awarded to Mr. Van’t Hof on March 1, 2020, that are subject to the satisfaction of certain stockholder return performance conditions relative to Diamondback’s peer group during the three-year performance period ending on December 31, 2022 and (vi) 27,168 performance-based restricted stock units awarded to Mr. Van’t Hof on March 1, 2021, which are subject to the satisfaction of certain stockholder return performance conditions relative to Diamondback’s peer group during the three-year performance period ending on December 31, 2023.

(4)Includes 7,403 restricted stock units, that are scheduled to vest on March 1, 2022. Excludes 3,450 restricted stock units, that are scheduled to vest on March 1, 2023. Also excludes (i) 13,183 performance-based restricted stock units awarded to Ms. Dick on March 1, 2019, that vested effective December 31, 2021 (representing 100% vesting of the originally reported amount) based upon final determination upon certification of certain stockholder return performance conditions relative to Diamondback’s peer group during the three-year performance period ended on December 31, 2021 by Diamondback’s compensation committee, (ii) 17,790 performance-based restricted stock units awarded to Ms. Dick on March 1, 2020, which awards are subject to the satisfaction of certain stockholder return performance conditions relative to Diamondback’s peer group during the three-year performance period ending on December 31, 2022 and (iii) 15,524 performance-based restricted stock units awarded to Ms. Dick on March 1, 2021, which are subject to the satisfaction of certain stockholder return performance conditions relative to Diamondback’s peer group during the three-year performance period ending on December 31, 2023.

(5)Includes 5,922 restricted stock units, that are scheduled to vest on March 1, 2022. Excludes 2,760 restricted stock units, that are scheduled to vest on March 1, 2023. Also excludes (i) 10,546 performance-based restricted stock units awarded to Mr. Zmigrosky on March 1, 2019, that vested effective December 31, 2021 (representing 100% vesting of the originally reported amount) based upon final determination upon certification of certain stockholder return performance conditions relative to Diamondback’s peer group during the three-year performance period ended on December 31, 2021 by Diamondback’s compensation committee and (ii) 14,232 performance-based restricted stock units awarded to Mr. Zmigrosky on March 1, 2020, that are subject to the satisfaction of certain stockholder return performance conditions relative to Diamondback’s peer group during the three-year performance period ending on December 31, 2022 and (iii) 12,420 performance-based restricted stock units awarded to Mr. Zmigrosky on March 1, 2021, which are subject to the satisfaction of certain stockholder return performance conditions relative to Diamondback’s peer group during the three-year performance period ending on December 31, 2023.

(6)Excludes 2,435 restricted stock units that are scheduled to vest on the earlier of the one-year anniversary of the date of grant and the date of the 2022 annual meeting of stockholders of Diamondback.

						Common Units												Class B Units
Name and Address of Beneficial Owner						Amount and Nature of Beneficial Ownership(1)						Percentage of Class Beneficially Owned						Amount and Nature of Beneficial Ownership(1)						Percentage of Class Beneficially Owned
Diamondback Energy, Inc.(2)       500 West Texas Avenue, Suite 1200       Midland, Texas 79701						—						—						107,815,152						100		%
Cardinal Capital Management, LLC(3)       4 Greenwich Office Park       Greenwich, CT 06831						3,199,594						8.4		%
ClearBridge Investments, LLC (4)       620 8th Avenue       New York, NY 10018						3,086,248						8.1		%				—						—
Capital World Investors (5)       333 South Hope Street       Los Angeles, CA 90071						2,859,750						7.5		%
Macquarie Group Limited (6)       50 Martin Place       Sydney, New South Wales, Australia						2,269,273						6.0		%
Kayne Anderson Capital Advisors, LP (7)       1800 Avenue of the Stars, Third Floor       Los Angeles, CA 90067						2,065,968						5.4		%				—						—

(1)Beneficial ownership is determined in accordance with SEC rules. The percentage of common units beneficially owned is based on 38,139,805 common units outstanding as of January 31, 2022. Except as noted, each unitholder in the above table is believed to have sole voting and sole investment power with respect to the common units and Class B units beneficially held.

(2)Diamondback Energy, Inc. is a publicly traded company and holds no common units and no Class B units directly. Diamondback has the beneficial ownership of 107,815,152 Class B units, which are held by Diamondback E&P LLC, its indirect wholly owned subsidiary (“Diamondback E&P”). The 107,815,152 Class B units, together with the same number of units of the Operating Company (each, an “Operating Company unit”), held by Diamondback E&P, are exchangeable from time to time, at Diamondback’s discretion, for common units (that is, one Operating Company unit and one Class B unit, together, are exchangeable for one common unit), and, as a result, Diamondback may be deemed to have the beneficial ownership of such common units. Diamondback also has shared voting and dispositive power of 107,815,152 Class B units held by Diamondback E&P, which represent 100% of the outstanding Class B units. The directors of Diamondback are Travis D. Stice, Steven E. West, Vincent K. Brooks, Michael P. Cross, David L. Houston, Stephanie K. Mains, Mark L. Plaumann and Melanie M. Trent. Travis D. Stice is the sole director of Diamondback E&P.

(3)Based solely on Schedule 13G filed with the SEC on February 14, 2022 by Cardinal Capital Management, LLC (“Cardinal Capital”). Cardinal Capital reported beneficial ownership of 3,199,594 common units, as well as sole voting power over 2,730,898 common units and sole dispositive power over 3,199,594 common units. No shared voting power and no shared dispositive power was reported by Cardinal Capital.

(4)Based solely on Schedule 13G/A filed with the SEC on February 9, 2022 by ClearBridge Investments, LLC (“ClearBridge”). The securities reported are beneficially owned by one or more open‑end investment companies or other managed accounts that are investment management clients of ClearBridge, an indirect wholly owned subsidiary of Franklin Resources, Inc. ClearBridge reported beneficial ownership of, as well as sole voting power and sole dispositive power over, 3,086,248 common units. No shared voting power and no shared dispositive power was reported by ClearBridge.

(5)Based solely on Schedule 13G filed with the SEC on February 16, 2021 by Capital World Investors (“Capital World”), a division of Capital Research and Management Company. Capital World reported beneficial ownership of, as well as sole voting power and sole dispositive power over, 2,859,750 common units. No shared voting power and no shared dispositive power was reported by Capital World.

(6)Based solely on Schedule 13G filed with the SEC on February 11, 2022 by Macquarie Group Limited on behalf of itself and Macquarie Management Holdings Inc, Macquarie Investment Management Business Trust and Ivy Investment Management Company. As of December 31, 2021, Macquarie Management Holdings Inc had sole voting and dispositive power over 2,268,849 shares, Macquarie Investment Management Business Trust had sole voting and dispositive power over 2,268,849 shares, and Ivy Investment Management Company had shared voting and dispositive power over 424 shares. Macquarie Group Limited is deemed to beneficially own 2,269,273 shares due to its ownership of the entities above. The address of Macquarie Bank Limited is 50 Martin Place, Sydney, New South Wales, Australia. The address of Macquarie Management Holdings Inc. and Macquarie Investment Management Business Trust is 2005 Market Street, Philadelphia, PA 19103. The address of Ivy Investment Management Company is 6301 Glenwood St Overland Park, KS 66202.

(7)Based solely on Schedule 13G jointly filed with the SEC on February 3, 2022 by Kayne Anderson Capital Advisors, L.P. and Richard A. Kayne. Kayne Anderson Capital Advisors, L.P. reported beneficial ownership of, as well as shared voting power and shared dispositive power over, 2,065,968 common units. Richard A. Kayne reported beneficial ownership of, as well as shared voting power and shared dispositive power over, 2,065,968 common units. No sole voting power and no sole dispositive power was reported by any filer.

Plan Category			Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)			Weighted-average exercise price of outstanding options, warrants and rights (b)			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders			—			—			—
Equity compensation plans not approved by security holders(1)			1,737,525			—			12,696,146

(1)This information relates to our LTIP, which our General Partner adopted at the closing of the IPO in May 2019. See “Item 11. Executive Compensation–Long-Term Incentive Plan included elsewhere in this Annual Report for a description of the LTIP.

The following sets forth information with respect to the treatment of the unvested equity awards, which were granted to the executive officers of our General Partner and were outstanding as of December 31, 2021 under the LTIP, in connection with certain termination events, including a termination related to a change of control of Rattler or Diamondback.

Under the terms of Mr. Stice’s phantom unit awards made to Mr. Stice under the LTIP, all unvested phantom unit awards granted to Mr. Stice will accelerate and immediately vest in the following circumstances: (i) upon the change of control of Rattler or Diamondback, provided that Diamondback is the sole General Partner of Rattler, (ii) Mr. Stice’s termination without cause, (iii) Mr. Stice’s resignation for good reason, or (iv) Mr. Stice’s death or disability. As of December 31, 2021, Mr. Stice held 68,572 unvested phantom units granted under the LTIP, all which are scheduled to vest in three equal installments beginning on May 28, 2022, and had a value of $780,349 as of December 31, 2021.

			Year Ended December 31, 2021
			(In thousands)
Revenues Generated under Agreements and Transactions with Affiliates
Produced water gathering and disposal commercial agreement			$	263,833
Sourced water gathering commercial agreement			$	65,503
Natural gas gathering commercial agreement			$	18,827
Crude oil gathering commercial agreement			$	8,104
Surface revenue transactions			$	231
Fasken Center agreement			$	8,910
Expenses Incurred under Agreements with Affiliates
Services and secondment agreement			$	7,657
Partnership agreement			$	738
Tax sharing agreement			$	1,319

			Year Ended December 31,
			2021						2020
			(In thousands)
Audit fees(1)			$	402					$	365
Audit-related fees(2)			—						66
Tax fees(3)			—						—
All other fees(4)			—						—
Total			$	402					$	431

(1)Audit fees represent amounts billed in each of the years presented for assurance and related services that are reasonably related to the performance of the annual audit or quarterly reviews.

(2)Audit-related fees represent amounts billed for each of the periods presented for professional services rendered in connection with those services normally provided in connection with statutory and regulatory filings or engagements including comfort letters, consents and other services related to SEC matters.

(3)Tax fees represent amounts billed in each of the years presented for professional services rendered in connection with tax compliance, tax advice, and tax planning.

(4)All other fees represent amounts billed in each of the years presented for services not classifiable under the other categories listed in the table above.

(a)			Documents included in this report:
			1. Financial Statements
			Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248)			F-1
			Consolidated Balance Sheets			F-2
			Consolidated Statements of Operations			F-3
			Consolidated Statements of Comprehensive Income			F-4
			Consolidated Statements of Changes in Unitholders’ Equity			F-5
			Consolidated Statements of Cash Flows			F-7
			Notes to Consolidated Financial Statements			F-8
			2. Financial Statement Schedules
			Financial statement schedules have been omitted because they are either not required, not applicable or the information required to be presented is included in our consolidated financial statements and related notes.