I Squared Capital has committed over $500m of cash and contributed its Delaware Basin midstream portfolio company, Pinnacle Midstream, and become a partner in BCP Raptor Holdco, the parent company for EagleClaw.
In addition, the parties announced the closing of EagleClaw’s previously-announced acquisition of Caprock Midstream. Proceeds from I Squared Capital’s investment, together with additional investments by Blackstone and EagleClaw’s management team, are being used to fund EagleClaw’s continued growth, including the expansion of EagleClaw’s system, the acquisition of Caprock Midstream, and the ongoing construction of the Permian Highway Pipeline.
The investment by I Squared Capital and the acquisitions of Caprock and Pinnacle further augment EagleClaw’s position as the leading privately-held midstream operator in the Permian’s Delaware Basin in west Texas. Pro forma for these acquisitions, the company operates nearly 1,000 miles of natural gas, natural gas liquids, crude, and water gathering pipelines; over 1.4 billion cubic feet per day of processing capacity (pro forma the completion of one plant currently in construction); and crude and water storage and disposal facilities.
In addition, EagleClaw now has nearly half a million acres in the core of the southern Delaware Basin under long-term dedication for midstream services. EagleClaw is also a 50 percent partner with Kinder Morgan on the Permian Highway Pipeline, an approximately $2bn pipeline project designed to transport up to 2.0Bcf/d of natural gas from the Permian Basin to the Katy, Texas area, with connections to the Gulf Coast and Mexico markets.
With the acquisition of Caprock Midstream and Pinnacle Midstream complete, the assets have been integrated into the EagleClaw system and now operate under the EagleClaw brand name. Today’s announcement is the next step in the overall Delaware Basin midstream consolidation as EagleClaw continues to grow and diversify its business.
Prior to the acquisition, Pinnacle was an independent midstream company providing natural gas gathering and processing and crude oil gathering services to producers in the Delaware Basin. Pinnacle operates approximately 100 miles of natural gas and crude gathering pipeline, approximately 30,000 Bbls of crude storage facilities, and a 60 MMcf/d natural gas processing facility. Pinnacle’s assets are located in close proximity to EagleClaw’s existing assets, providing a complementary asset footprint. Pinnacle serves several highly active producers, who have committed approximately 35,000 acres for long-term dedication of midstream services. The acquisition of Pinnacle by EagleClaw significantly benefits Pinnacle’s customers by enhancing flow assurance and reliability and providing additional flexibility for customers’ natural gas, crude, and NGL takeaway. Pinnacle is now a subsidiary of EagleClaw Midstream Ventures LLC. All field personnel of Pinnacle are being offered opportunities to remain with the company.
For more information visit: www.eagleclawmidstream.com
7th November 2018