Medallion-Midland Basin System Map

Laredo Petroleum Inc.'s (NYSE: LPI) valuable Medallion-Midland Basin crude oil pipeline system is for sale, the Tulsa, Okla.-based company said July 19.

Laredo, which owns a stake in Medallion, said that a process has been initiated to potentially sell 100% of the pipeline's ownership interests. The company owns 49% of the ownership interest in the Medallion pipeline system through its subsidiary Laredo Midstream Services LLC.

"At this time there can be no assurance that such potential sale will ultimately be consummated or, if consummated, the specific terms of such sale," Laredo said in the press release.

UPDATE - All Systems Go: Laredo Launches Midland Pipeline Sale

The Medallion system comprises about 500 miles of pipeline with more than 325,000 net dedicated acres in West Texas.

The value of Medallion has been noticed by producers as well as multiple private investment and midstream companies, Richard C. Buterbaugh, Laredo's CFO, said during a February earnings call, according to a Seeking Alpha transcript.

"The explosive growth in throughput on the Medallion system, which is expected to grow an additional 75% by year-end 2017, creates additional EBITDA growth potential that we anticipate will be disproportionate to future investments in the system," Buterbaugh said. "We believe that this provides added flexibility for Laredo to, in essence, fund accelerated drilling activities when we deem appropriate."

Laredo previously stated the possibility to monetize its stake in Medallion to either further de-lever its balance sheet or accelerate drilling activities in the Permian.