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February Top U.S. Midstream Deals: Delaware Appears As the Key Area
03/04/2019
As production in key locations continue to steadily grow, most midstream companies continued expanding their infrastructure to connect their major producing areas to the promising market delivery locations. Delaware saw most of this activity, where gathering infrastructure is still thought to be underdeveloped. Experts point out the proximity of Mexican and U.S. Gulf of Mexico market as well as growth of the U.S. exports capacity to be primary drivers of CAREX going into new projects.
For instance, see how Howard Energy Partners and NextEra Energy Partners connect their systems to reach both domestic downstream as well as exports market.
Similar capital inflow was seen in Agua Blanca NG Pipeline Deal as First Infrastructure Capital Advisors increased its stake in the pipeline.
Another activity - not quite in Delaware but close enough - was seen at New Mexico - Texas border area, where Matador Resources continued expand its gathering, storage and processing facilities as it enetered the San-Mateo II JV, second one with Five Point Energy.
All the midstream sector February 2019 deals that drew our attention can be found in the table below.
More information still can be discovered with Rextag's Energy Datalink as well as with its GIS data services. Request a free-trial access with us today.
Date announced | Buyer(s) | Seller(s) | Assets | Location | Deal Value | Date closed |
---|---|---|---|---|---|---|
Feb 4, 2019 | First Infrastructure Capital Advisors LLC | WPX Energy Inc. | 20% equity interest in WhiteWater Midstream’s 36-inch Agua Blanca natural gas pipeline (see the map) | Delaware Basin | $300 MM | Expected to close 1Q 2019 |
Feb 4, 2019 | First Infrastructure Capital Advisors LLC | WhiteWater Midstream LLC, Denham Capital Management LP, Ridgemont Equity Partners | WhiteWater Midstream wholly acquired including its 60% stake in Agua Blanca (see the map) | Expected to close 1Q 2019 | ||
Feb 13, 2019 | NextEra Energy Partners LP | >Howard Energy Partners | Formed JV to develop additional natural gas transportation opportunities in the Eagle Ford shale region of South Texas | South Texas: Webb, Duval, Zapata, Dimmit, La Salle, McMullen, Live Oak and Jim Wells counties | Undisclosed | Feb 13, 2019 |
Oct 3, 2018 | Salt Creek Midstream LLC, Ares Management LP ARM, Energy Holdings LLC | Noble Midstream Partners LP | Formed 50/50 JV partnership to develop a crude oil pipeline and gathering system | Delaware Basin | Feb 8, 2019 | |
Feb 19, 2019 | The Blackstone Group LP, GSO Capital Partners LP | Targa Resources Corp. | 45% stake in Targa Badlands, which operates oil and gas gathering and processing assets (see the map) | Bakken and Three Forks shale plays, Williston Basin of ND. | $1,600 MM | Expected to close 2Q 2019 |
Feb 25, 2019 | Five Point Energy LLC, San Mateo Midstream LLC | Matador Resources Co. | Formed a new midstream JV, San Mateo II, to expand current gathering, processing and saltwater disposal capacity. 51% owned by Matador plus operational control | Northern Delaware Basin | Undisclosed | Feb 25, 2019 |
Feb 26, 2019 | Hess Infrastructure Partners LP | Summit Midstream Partners LP | Water gathering assets of the Tioga Gathering System in Williams County, Western ND. | Williston Basin; Bakken | $67 MM | Expected to close 1Q 2019 |
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Energy Transfer Secures $7.1 Billion Deal to Take Over Crestwood
Energy Transfer is taking on $3 billion of Crestwood's debt in a stock deal. This move expands their reach in the Williston and Delaware basins and gets them into the Powder River Basin for the first time.
Talos Energy Buys EnVen for $1.1 Billion to Expand
Talos Energy Inc. is acquiring EnVen Energy Corp. for $1.1 billion to raise Talos’ Gulf of Mexico production by 40%. The purchase of EnVen, a private operator, increases Talos' operated deepwater facility footprint 2 times, expanding key infrastructure in existing Talos operating areas. Almost 80% of the assets will be deepwater, with Talos operating more than 75% of the acreage it holds interests in. During a conference call on September 22, it was announced that the EnVen purchase “just checks a lot of boxes” in terms of scale, assets, similar strategies, and what Talos is doing from a technology standpoint. EnVen holds 78 MMboe of 2P reserves and 420,000 gross acres in the Gulf of Mexico. The deal also includes about 24,000 boe/d to Talos’ production stream. Consideration for the transaction consists of 43.8 million Talos shares and $212.5 million in cash, plus the assumption of EnVen's net debt upon closing, currently valued to be $50 million at year-end 2022.
The Williston Basin is a big area filled with layers of rock that sits next to the Rocky Mountains in western North Dakota, eastern Montana, and the southern part of Saskatchewan in Canada. This area covers roughly 110,000 square miles. Geologically, it's very similar to the Alberta Basin in Canada. People started drilling for oil in the Williston Basin back in 1936, and by 1954, most of the land where oil could likely be found was already claimed for drilling. The Bakken Formation with parts of Montana, North Dakota, Saskatchewan, and Manitoba has become one of only ten oil fields globally to yield over 1 million barrels per day (bpd) since the late 2000s. It is currently the third-largest U.S. shale oilfield, behind the Permian and Eagle Ford. The boom in the Bakken started around September 2008, coinciding with the U.S. housing market crash. The application of new technologies, such as swell packers enabling multiple-stage fracturing, significantly enhanced oil recovery, making the Bakken Formation a key player in the U.S. In 2022, the Bakken oil field saw big improvements in how much oil and gas it could produce. At the start of the year, 27 drilling rigs were working there, more than double the 11 rigs from the start of 2021. Important upgrades included making the Tioga Gas Plant able to process 150 million cubic feet more gas each day, and making the Dakota Access Pipeline bigger, increasing its oil transport capacity from 570,000 to 750,000 barrels every day.
Continental Resources is expanding its operations in the Midland Basin, including taking over some assets that used to belong to Occidental Petroleum. The company plans to use its expertise in exploration in this area.
Equinor and EQT Corporation have agreed that Equinor will exchange its operated assets in the Marcellus and Utica shale formations in Ohio for a stake in EQT’s non-operated interests in the Northern Marcellus formation.