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Although other oil producers in the Permian Basin look to be slowing the development of their assets in the face of transportation bottlenecks that are making it tough to get oil out of the basin, Diamondback Energy has teamed up with the Carlyle Group to form a joint venture to develop Diamondback’s assets in the Permian. The companies will jointly invest $620 million to develop oil and gas assets in the San Pedro area of Pecos County, the location of the majority of Diamondback’s acreage in the basin. Carlyle will fund 85% of the development program on these assets. After reaching performance milestones, Carlyle’s working interest will be transferred, largely, to Diamondback.

A recent report from the Department of Energy suggests that the Diamondback move makes sense; Production in the Permian Basin will grow faster than that in any other U.S. oil shale geology in October–even with pipeline capacity bottlenecks. Permian production will grow by 31,000 barrels a day in October bringing total production from the Permian Basin to 3.5 million barrels per day.

Shares of Diamondback Energy, a member of my Jubak Picks Portfolio, closed up 3.07% today to $128.58. The shares have gained 14.7% since September 10, but the charts suggest that there’s significant resistance about $5 a share ahead at $133 or so.