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Momentum Midstream Becomes a Leader in Haynesville Due to Latest Acquisitions10/13/2022
Houston-based company Momentum Midstream LLC on September 22 purchased Midcoast Energy LLC’s East Texas business from an affiliate of ArcLight Capital Partners LLC and Align Midstream LLC from Tailwater Capital and claimed that it establishes a leading presence in the Haynesville Shale.
Terms of the transactions were not disclosed. However, Momentum’s long-time financial partner, EnCap Flatrock Midstream, came alongside some proven institutional energy investors in Yorktown Energy Partners, Martin Sustainable Resources, Ridgemont Equity Partners, Bengas Midstream Partners, and Blackstone Credit to support Momentum’s Haynesville Shale expansion plans, which also add a new carbon capture project, according to EnCap Flatrock Managing Partner and Founder Billy Lemmons.
The deal of Midcoast’s East Texas business, known as Midcoast ETX, and Align Midstream was presented by Momentum alongside a new natural gas gathering and carbon capture project in the Haynesville Shale.
New Generation Gas Gathering or NG3 project will collect natural gas produced in the Haynesville Shale for re-delivery to premium Gulf Coast markets, including LNG export. Moreover, the NG3 project includes a carbon capture and sequestration component that will eliminate 100% of the CO₂ and accumulate it underground for a long time, creating a net negative carbon footprint.
With the combined assets of Midcoast ETX and Align Midstream, Momentum is currently delivering volumes of more than 2 Bcf/d for a diverse customer base composed of producers, utilities, end-users, and LNG exporters.
Momentum’s footprint in the Haynesville includes about 3,000 miles of gathering pipelines, 1.5 Bcf/d of treating capacity, 700 MMcf/d of processing capacity, 200,000 HP of compression, and 820 miles of pipelines transporting gas to the Gulf Coast markets in southeast Texas and the Carthage and Bethel markets in East Texas.
Momentum also announced on Sept. 22., that the board of directors took a final investment decision (FID) on NG3, its new natural gas gathering and carbon capture project.
The NG3 project is financed by an anchor commitment from Chesapeake Energy Corp. and will have an initial capacity of 1.7 Bcf/d and is expandable to 2.2 Bcf/d.
Momentum CEO said that constant with the past business practices, Chesapeake Energy’s anchor commitment for NG3 comes with an option to get 35% of the project, creating alignment between Momentum and one of the biggest Haynesville Shale producers.
The NG3 project will also capture and permanently sequester up to 2 million tons per annum of CO₂ and is anticipated to start operations in the second half of 2024.
Barclays served as the exclusive financial adviser to Momentum on the Midcoast ETX acquisition. Barclays also arranged the deal financing along with Jefferies Finance LLC, Blackstone Credit, and Wells Fargo Securities LLC.
Jefferies LLC took a part as the exclusive financial adviser to Momentum on the Align acquisition. Vinson & Elkins LLP served as legal counsel to Momentum on both the Midcoast ETX and Align Midstream acquisitions.
Jefferies LLC and Latham & Watkins LLP advised ArcLight Capital Partners LLC on the sale of Midcoast. Piper Sandler & Co. and Locke Lord advised Tailwater Capital on the sale of Align Midstream.
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Earthstone Energy Inc., based in Texas, announced the transaction on June 28: the acquisition of Titus Oil&Gas which will raise production in the Delaware Basin by 26%. The $627 million acquisition fills the Permian Basin in Eddy and Lea counties, N.M. with 86 net locations on 7,900 net acres of leasehold, while it is not clear how much of the leasehold might be on federal acreage It is Earthstone’s seventh acquisition since 2021, a span that includes the closing of approximately $1.89 billion in acquisitions in the Permian Basin. The purchase of Titus Oil & Gas Production LLC and Titus Oil & Gas Production II LLC, privately held companies backed by NGP Energy Capital Management LLC, is estimated at $575 million in cash and it is the equivalent of $52 million in stock (3.9 million shares of its Class A common stock based on the June 24 closing price). Titus shared that its net production in June was 31,800 boe/d. The company had reserves of approximately 28.9 MMboe. Earthstone is sure its net production will increase, at the midpoint, by 20,500 boe/d (65% oil) in the fourth quarter.
TC Energy Corp. had reached a deal with a Mexican state utility to build a $4.5 billion natural gas pipeline, according to a company release on Aug. 4. The natural gas to Mexico's central and southeast regions will be furnished by the 1.3 bcfd offshore Southeast Gateway Pipeline, the Canadian pipeline operator said. Due to the most serious trade spat with #Mexico over the United States-Mexico-Canada Agreement, Canada and the United States made the deal with Comisión Federalde Electricidad (CFE). TC Energy and CFE in conjunction with the alliance also took the final investment decision (FID) on the 715-km Southeast Gateway. The pipeline will serve southeast Mexico, starting onshore in Tuxpan, Veracruz, then proceeding offshore, making landfall at Coatzacoalcos, Veracruz, and Dos Bocas, Tabasco.
Rangeland Energy has agreed to sell Rangeland Midstream Canada to Kingston Midstream Alberta and remains committed to future Canadian midstream investments. Texas-based Rangeland Energy, supported by financial partner EnCap Flatrock Midstream, has inked a deal to sell its Canadian subsidiary, Rangeland Midstream Canada Ltd., to Calgary's Kingston Midstream Alberta Ltd. for cash.
The merger between ONEOK and Magellan received approval from Magellan shareholders, securing just 55% of the total votes at Magellan’s meeting on Sept. 21. ONEOK Inc. has successfully concluded the acquisition of Magellan Midstream Partners LP on Sept. 25. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.
Viper Energy's deal, comprised of cash and equity, secures an additional 2,800 net royalty acres in the Midland Basin and 1,800 in the Delaware Basin. Viper Energy Partners LP, a Diamondback Energy Inc. subsidiary, has inked a deal to acquire mineral and royalty interests in the Permian Basin. The deal, valued at around $1 billion, is with Warwick Capital Partners and GRP Energy Capital. Viper was established by Diamondback with the purpose of owning, purchasing, and capitalizing on oil and natural gas assets in North America, specifically targeting mineral and royalty interests.