EnLink Midstream Partners LP (NYSE: ENLK) and EnLink Midstream LLC (NYSE: ENLC) announced Feb. 2 that the partnership will acquire natural gas gathering and processing facilities in the Permian Basin.
The Dallas-based partnership said it signed an agreement to acquire Coronado Midstream Holdings LLC for $600 million.
Coronado, based in Midland, Texas, operates three cryogenic gas processing plants and a gas gathering system in the North Midland Basin including about 270 miles of gathering pipelines, 175 million cubic feet per day (MMcf/d) of processing capacity and 35,000 horsepower of compression. Construction of an additional 100 MMcf/d of processing capacity and gathering system expansions of the Coronado system are currently underway.
Coronado's key assets have been constructed within the past five years and the system has current inlet volumes of about 100 MMcf/d.
EnLink plans to connect the Coronado system with its Bearkat system to create a multi-county rich gas gathering and processing system to create optimization opportunities for its customers and its product marketing services.
In just over four months, EnLink has announced roughly $1 billion of acquisitions, said Barry E. Davis, EnLink president and CEO, in a statement.
This is consistent with the partnership's growth strategy to expand its platform in key producing areas, he said.
“This transaction builds on EnLink’s growing midstream platform in West Texas,” he said. “The Coronado assets are located in the core of the North Midland Basin and are supported by the region’s most focused and active producers."
"By combining Coronado with our recent LPC acquisition and our existing footprint, we have the opportunity to create tremendous value for our producer customers by linking our gas gathering, processing and crude oil logistics operations to provide a full-service midstream solution,” he said.
EnLink expects the acquisition of Coronado to be neutral to distributable cash flow per unit at both the partnership and the general partner in the near-term given the current market environment and taking into consideration the producers’ current drilling plans.
The transaction is expected to close in the first quarter and is subject to antitrust clearance and other customary closing conditions.
Coronado Midstream LLC was advised by Barclays Ltd. and Sidley Austin LLP and is owned by Reliance Energy, Wexford Capital LP, Gulfport Energy Corp. (NASDAQ: GPOR), Wallace Family Partnership LP and Ted Collins Jr.
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