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February Top U.S. Midstream Deals: Delaware Appears As the Key Area03/04/2019
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.
|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|
Pioneer Natural resources is looking to divest properties in the lone star state. According to Rextag, Pioneer’s Delaware assets on sale have a trailing 12 month production of just over 22 MBOE against a total Permian Basin production of almost 212 MBOE. (The sale, if it happens, will effectively lead to a 10% decrease of Pioneer’s asset base in terms of the previous year's production.)
Crestwood & Oasis Midstream merge to create a top Williston #basin player. $1.8 billion deal is expected to close during the Q1 of 2022. The transaction will result in a 21.7% ownership stake for Oasis in Crestwood common units. The remaining ownership of Oasis in Crestwood will also be of benefit to the company since it will create a diversified midstream operator with a strong balance sheet and a bullish outlook after this accretive merger.
On November 2, Cardinal Midstream Partners, an independent Dallas-based midstream energy company, concluded definitive agreements with Medallion Midstream Services to purchase Medallion’s natural gas gathering and processing business in the Delaware Basin in West Texas. The transaction is subject to customary closing conditions and is expected to close in early 2023.
On October 19, Shell USA completed the almost $1.96 billion acquisition of the master limited partnership. The company paid $15.85 in cash for every common unit representing limited partner interests in SHLX not held by Shell USA or its affiliates. A subsidiary of Shell USA has 269,457,304 SHLX common units or roughly 68.5% of SHLX common units.
A $3.0 billion cash definitive agreement to purchase the Eagle Ford assets of Ensign Natural Resources has been concluded by Marathon Oil Corporation on November 2.