By David French

HOUSTON, March 9 (Reuters) - U.S. oil and gas exploration and production company Diamondback Energy Inc is seeking investors, including buyout firms, to finance part of its drilling operations in the Permian Basin, according to three people familiar with the matter.

Drilling joint ventures, referred to in the energy industry as "DrillCos," allow companies to raise cash from investors such as private equity firms to develop acreage.

Such a structure could prove attractive to energy companies at a time when shareholders are putting increasing pressure on them to improve returns and efficiency, instead of spending extra cash on new developments.

Diamondback has sent out a teaser to potential investors in a DrillCo arrangement, according to sources. UBS Group AG is advising the company on the process, two of the sources said. The amount of money raised by the DrillCo will depend on investor demand, one of the sources added.

Diamondback did not immediately respond to a request for comment. UBS declined to comment.

Given its position in the Permian Basin, a field which stretches across Western Texas and Eastern New Mexico and has some of the lowest production costs in the U.S. onshore industry, Diamondback is hoping to attract strong investor interest.

Traditionally, DrillCos take control of drillable land and generally turn over 100 percent of the cash flow from oil and gas production to investors until they earn a 15 percent return. At that point, control reverts to the producer, with the investor's stake shrinking to about 10 percent of remaining production.

Other oil producers that have completed DrillCos in recent years include EOG Resources and Alta Mesa Holdings . Jones Energy said in November it was evaluating a number of strategic and financial options including a possible DrillCo. (Additional reporting by Ernest Scheyder in Houston Editing by Leslie Adler)