Permian Basin pure-play Diamondback Energy Inc. on Monday launched an initial public offering of its midstream unit, which provides oil, natural gas and water-related services.

Rattler Midstream LP is offering 33 million common units initially priced at $16-19/unit. The company is to be listed on Nasdaq under “RTLR.”

Net proceeds would be distributed to Diamondback, in part to reimburse for capital expenditures. The common units offered represent about a 22% limited partner interest in Rattler. Diamondback and its subsidiaries would own the remaining 78%.

Rattler was formed last summer by Diamondback to own, operate, develop and acquire midstream infrastructure in the Permian’s Midland and Delaware sub-basins. It provides services under long-term, fixed-fee contracts.

Late last year, Rattler exercised an option to acquire a 10% equity interest in Phillips 66 Partners LP's Gray Oak crude pipeline system, and increased its volume commitments. Gray Oak is being designed to transport up to 900,000 b/d from the Permian and Eagle Ford Shale to the Texas coast.

During a first quarter conference call earlier this month, Diamondback management said production guidance would be slightly lower this year than expected because of ongoing asset sales. The full-year guidance is set at 272,000-287,000 boe/d from 275,000-290,000 boe/d.