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$1B Deal: Williams Buys Out Houston-based Midstream in Haynesville Basin

Earlier this month, Williams announced that it has reached an agreement to purchase the gathering and processing assets of Trace Midstream, a portfolio company of Quantum Energy Partners, in a $950 million deal.

By adding the Trace system to Williams' existing footprint, the company gains expanded capacity in one of the nation's largest growth basins, bringing its Haynesville gathering capacity to over 4 Bcf/d — more than 200% growth. Following this merge, It is anticipated that Williams will invest at around 6 times 2023 EBITDA, with minimal expansion capital required and significant growth forecasted, thus helping the company's credit metrics to stay afloat.

This deal highlights Williams’s commitment to being the leader in providing infrastructure that safely delivers natural gas products to reliably fuel the clean energy economy.

The agreement also includes a long-term capacity commitment from Trace customer and Quantum affiliate Rockcliff Energy to support Williams' Louisiana Energy Gateway project (LEG). By connecting to premium Transco markets, the LEG project will gather the responsibly sourced natural gas produced in Haynesville. It will deliver it to industrial and LNG export markets along the Texas and Louisiana Gulf Coast

The LEG project was further strengthened with the signing of a Memorandum of Understanding between Williams and Quantum to establish a joint venture that will enable Quantum to become a partner and equity investor in the project. Williams will bring its expertise as a leading developer and operator of clean energy infrastructure together with Quantum's capacity as a global provider of private capital for responsible sourcing of energy and the transition to a low carbon economy.

For Williams, the opportunity to support Rockcliff's success and enable them to access growing markets represents a unique way to demonstrate how natural gas plays an essential role in reducing emissions, lowering costs, and providing reliable, secure energy to the US and around the world.

This partnership is also welcomed by Quantum, since working with exceptional entrepreneurs such as those from Trace and Rockcliff, who developed a strategic infrastructure platform with high ESG standards, has been at the foundation of Quantum’s success. This makes the Williams-Haynesville LEG partnership a crucial link between responsibly sourced Haynesville natural gas and the Gulf Coast's premium LNG markets.

If all regulatory approvals are received, the transaction should close by the end of the second quarter. RBC Capital Markets served as lead financial advisor to Williams; Citi served as lead financial advisor to Trace. Williams was represented by Davis Polk & Wardwell LLP; Trace was represented by Vinson & Elkins LLP.

Naturally, such large movements in the market are difficult to visualize without the appropriate resources, but for this, you can always contact us. If you are interested in finding out more about possible pipeline routes as well as the current level of different basins development, please, reach out to our Houston sales office or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.

Tel. +1 713-203-3128

Email: treitmeier@hartenergy.com

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Major: Ameredev II Oil Producer to be Sold for $4 Billion by EnCap

In light of the conflict in Ukraine, buyout firms are currently scurrying to make cash from the U.S. crudeprices reaching their highest level since 2008. And one of the largest privately-owned US-based oilproducers may be up for sale. EnCap Investments looks to sell its portfolio company Ameredev II for over $4 billion including debt. It’s important to note, however, that both EnCap and Ameredev II alike are staying tight-lipped on the matter.

Crescent Energy closed the acquisition of Uinta Basin assets in Utah that were previously owned by EP Energy for $690 million, a few hundred million dollars below the original price. The accretive deal increases Crescent's Rockies position and adds significant cash flow and a portfolio of high-quality oil-weighted undeveloped sites. In addition to its acquired Uinta assets, Crescent's pro forma year-end 2021 provided reserves totaled 598 million boe, of which 83% was developed, 55% was liquid, and its provided PV-10 was $6.2 billion.

Oil output in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. Additionally, gas productivity in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Given that this growth has been expected, recent global market changes make forecasting the output even more challenging. Learning how production will change is easier with early activity tracking, a new service recently launched by Rextag – Pad Activity Monitor. With the help of PAM, you are able to monitor well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days. Additionally, it cuts down activity reporting lag times by at least 98%, from 120-180 days down to just 5-8 days. In order to access reports, charts, tables, and mapping visualizations via Rextag’s Energy DataLink use a web-based application allowing users to filter, download and identify activity on a map or data table. Moreover, customers will be able to set up daily, weekly, and monthly email report notifications.

The EIA forecasts that total output in the main U.S. shale oil basins will increase 142,000 bbl/d to 8.761 million bbl/d in June, the most since March 2020. Oil productivity in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. In the largest shale gas basin, the productivity in Appalachia in Pennsylvania, Ohio and West Virginia will grow up to 35.7 Bcf/d in June, its highest since beating a record 36 Bcf/d in December 2021. Gas output in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Speaking of the Permian future output, putting hands on upcoming changes in production has recently been made easier with the new Rextag's service - Pad Activity Monitor. Thanks to satellite imagery and artificial intelligence, customers are able to monitor the oil and gas wells and are provided with near real-time activity reports related to drilling operations. However, it is noticed that productivity in the largest oil and gas basins has decreased every month since setting records of new oil well production per rig of 1,544 bbl/d in December 2020 in the Permian Basin, and new gas well production per rig of 33.3 MMcf/d in March 2021 in Appalachia.

No sooner had the crude prices soared above $100/bbl than the industry professionals believed in an incredible growth of drilling activity in North America’s largest shale patch. Analysts speculate that additional output of 500,000 barrels of oil daily would become a significant part (4%) of overall U.S. daily production. That is going to flatter oil and gasoline prices. Drilling permits in the Permian Basin are persistently growing, averaging approximately 210 at the beginning of April. Moreover, the permits trend is noticed as an all-time high as a total of 904 horizontal drilling permits were awarded last month. Nowadays, learning and analysing the current situation and predicting the future development become easier with early activity tracking, a new service recently launched by Rextag. Rextag's Pad Activity monitor (PAM) allows you to see well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days with the help of satellite imagery and artificial intelligence. While the increase in drilling will result in higher production, U.S. shale producers will have to overcome several hurdles including labor shortages and supply constraints.

2022 blog posts