Court approves Azure Midstream liquidation plan
On May 19, 2017 the United State Bankruptcy Court for the Southern District of Texas, Houston Division approved Azure Midstream Partners LP's Fifth Amended and Restated Plan of Liquidation filed with the court on May 18, 2017. The plan is expected to become effective on June 2, 2017.
On January 30, 2017 Azure Midstream Partners LP, together with its general partner and its direct and indirect subsidiaries, filed voluntary petitions with the Court under Chapter 11 of title 11 of the US Bankruptcy Code.
On March 15, 2017 Azure entered into a purchase and sale agreement with BTA Gathering LLC (BTA) pursuant to which Azure sold substantially all of it business and assets to BTA. The sale closed on April 28, 2017.
Noble Energy sells Marcellus Midstream to Quantum Energy Partners for $765M
Noble Energy Inc. has agreed to divest the holding company which owns a 50% interest in CONE Gathering LLC and 21.7 million common and subordinated limited partnership units to a portfolio company of Quantum Energy Partners for total cash consideration of $765 million. The limited partnership units represent a 33.5% ownership interest in CONE Midstream Partners LP. CONE Gathering owns the general partner of CONE Midstream.
Noble Energy's cumulative 2017 divestiture proceeds total approximately $2 billion, with the amount primarily representing an exit of the company's Appalachia upstream and midstream businesses. Proceeds announced year-to-date are being utilized to cover the cash costs associated with the Clayton Williams Energy acquisition, to reduce debt, and to provide additional financial capacity to support the company's US onshore oil development.
Closing of the transaction is anticipated in the third quarter this year, subject to customary closing conditions and adjustments. BofA Merrill Lynch acted as the sole financial advisor to Noble Energy on the CONE Midstream transaction and Vinson & Elkins LLP served as legal counsel.
In a note following the news, Raymond James analysts said: "While not a huge needle mover, we like the move from a strategic standpoint, as the transaction allows the company to continue to hone its focus in on more oily upstream assets as well as focus on Noble Midstream Partners (NBLX) on the midstream side."
Aspen Midstream formed with commitment from Encap Flatrock
Dallas, TX-based Aspen Midstream LLC has secured an initial commitment of $200 million from EnCap Flatrock Midstream and the Aspen Midstream management team. Launched in May 2017, Aspen Midstream offers integrated midstream solutions to oil and gas producers operating across North America. Services include natural gas gathering, processing, compression and treating; condensate stabilization and vapor recovery; crude oil gathering and terminaling; and produced-water gathering and disposal.
CEO James Clarke leads the management team. He has more than 19 years of energy industry experience, most recently as vice president of business development at Energy Transfer Partners. Other founding members are chief commercial officer Stephen Reilly and COO Robert Underwood. Prior, Reilly served as senior director of business development at Energy Transfer Partners, where he worked alongside Underwood, who served as director of engineering.
Aspen Midstream was advised by Mack Matheson & Marchesoni PLLC. Thompson & Knight LLP represented EnCap Flatrock Midstream.
Brazos Midstream expands in Southern Delaware Basin
Brazos Midstream Holdings LLC has completed multiple crude oil and gas gathering and processing projects in the southern Delaware Basin. Brazos commenced operation of a new 60 million cubic feet per day (MMcf/d) natural gas processing plant (Comanche I), several new compressor stations and approximately 150 miles of large diameter, low and high-pressure gas gathering pipelines. The project also included the construction of 35 miles of crude oil gathering pipelines, two crude oil storage terminals with a combined capacity of 50,000 barrels and connections to multiple downstream crude oil pipelines.
The fully-operational Comanche I and associated pipelines are located in Ward, Reeves, and Pecos counties, Texas. Brazos has begun construction of a second gas processing plant (Comanche II), which will add 200 MMcf/d of incremental processing capacity. Comanche II is expected to be operational during the first quarter of 2018 and will increase Brazos' total operated processing capacity in the Delaware Basin to 260 MMcf/d.
Brazos anticipates further expansion of its announced processing capacity, which could include an additional 200 MMcf/d natural gas processing plant, as early as 2018.
Thunder Creek acquires Powder River midstream assets from Devon
Meritage Midstream Services II LLC and its subsidiary Thunder Creek Gas Services LLC noted that Thunder Creek has acquired certain midstream assets located in the southern part of Wyoming's Powder River Basin from Devon Energy Production Co. LP, a wholly owned subsidiary of Devon Energy Corp. The assets include approximately 115 miles of natural gas gathering pipeline and associated equipment and constitute substantially all of Devon's midstream assets across Wyoming's Powder River Basin. The transaction includes a new long-term dedication from Devon to Thunder Creek of 250,000 acres located in the basin. Meritage also announced that two premier producers have awarded gathering and processing contracts to Thunder Creek for the majority of their 2017 Powder River Basin drilling programs. These operators control an estimated 400,000 to 600,000 net acres in the play.
These transactions increase the number of acres dedicated to Thunder Creek to more than 1 million acres. As a result, Thunder Creek plans to expand processing capacity at 50 Buttes from 90 MMcf/d to 180 MMcf/d with a targeted in-service date of late 2017 or early 2018 and expects to add more than 49,000 horsepower of compression, add four to six new compressor stations and build 425 miles of gathering and transportation pipeline over the next five years. Thunder Creek expects to expand processing capacity by more than 390 MMcf/d in this same time period. Vinson & Elkins LLP provided legal counsel to Meritage on the transaction with Devon.
Antero Midstream GP LP closes IPO
Antero Midstream GP LP (AMGP) closed its initial public offering of 37,250,000 common shares representing limited partner interests in AMGP by Antero Resources Investment LLC, at a public offering price of $23.50 per common share for total gross proceeds (before underwriters' fees and estimated expenses) of approximately $875 million. AMGP will not receive any of the proceeds from the common shares to be sold by the Selling Shareholder. AMGP owns the general partner of Antero Midstream Partners LP and incentive distribution rights in Antero Midstream and has elected to be classified as an entity taxable as a corporation for US federal income tax purposes.
At the closing of the offering, the public holds an approximate 20.0% limited partner interest in AMGP and the Selling Shareholder holds the remaining approximate 80.0% limited partner interest in AMGP.
Morgan Stanley, Barclays, and JP Morgan acted as joint book-running managers for the offering. Baird, Citigroup, Goldman Sachs & Co. LLC, and Wells Fargo Securities acted as book-running managers.
In connection with the offering, Antero Resources Midstream Management LLC (ARMM) has converted into a Delaware limited partnership, and, in connection with such conversion, has changed its name to Antero Midstream GP LP.
Oasis plans Midstream asset IPO
Oasis Petroleum Inc. intends to contribute a portion of its midstream assets to a Master Limited Partnership (MLP) and sell a minority interest in the MLP in an initial public offering. The midstream assets that are expected to be contributed to the MLP are located in the Williston Basin area of North Dakota and/or Montana and include a portion of Oasis's (i) crude oil gathering and transportation system, (ii) natural gas gathering and processing system and (iii) water handling systems.
"OAS had been building out its midstream assets the last few years in the Williston Basin with an eye on one day being able to monetize them in the form of a partial sale or IPO," noted Jefferies analysts in a note following the news. "We see a number of logical uses of proceeds including de-levering the balance sheet and/or accelerating its upstream operations where well returns have improved significantly. Leverage is much better than last year but is still relatively high when compared to oily peers at 3.6x 2017 net-debt-to-EBITDA and 3.5x 2018 net-debt-to-EBITDA (at the strip). Perhaps a "dark horse" candidate for the proceeds would be using the cash to help fund another acquisition, much like the one it just closed late last year that brought in cash flow and additional core Williston locations. Recall, OAS previously estimated its 4Q17 midstream annualized EBITDA at $155 MM," the analysts continued.
Oasis expects to file a registration statement with the Securities and Exchange Commission in the second quarter of 2017.
Lucid Commissions Red Hills II Cryogenic Processing Plant
With the recent startup of Lucid Energy Group's Red Hills II cryogenic natural gas processing plant in Lea County, New Mexico, the Red Hills Natural Gas Processing Complex has the capacity to process 310 million cubic feet per day, bringing the total processing capacity of Lucid's South Carlsbad Gas Gathering and Processing System in Lea and Eddy counties to 345 MMcf/d.
NextDecade selects GE Oil & Gas for LNG plant, pipelines
NextDecade LLC has named GE Oil & Gas as the exclusive supplier of gas turbine and compressor equipment for the liquefaction trains of the Rio Grande LNG project and the associated Rio Bravo Pipeline. The 27 million tons LNG per annum project is located in Brownsville, Texas.
In addition to technology and services, GE Oil & Gas is providing NextDecade with a common equity investment, and is granted the right to invest up to a specified amount in project-level equity and debt financing for Rio Grande LNG at the time of final investment decision.
