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$1B Deal: Williams Buys Out Houston-based Midstream in Haynesville Basin
03/25/2022
Earlier this month, Williams announced that it has reached an agreement to purchase the gathering and processing assets of Trace Midstream, a portfolio company of Quantum Energy Partners, in a $950 million deal.
By adding the Trace system to Williams' existing footprint, the company gains expanded capacity in one of the nation's largest growth basins, bringing its Haynesville gathering capacity to over 4 Bcf/d — more than 200% growth. Following this merge, It is anticipated that Williams will invest at around 6 times 2023 EBITDA, with minimal expansion capital required and significant growth forecasted, thus helping the company's credit metrics to stay afloat.
This deal highlights Williams’s commitment to being the leader in providing infrastructure that safely delivers natural gas products to reliably fuel the clean energy economy.
The agreement also includes a long-term capacity commitment from Trace customer and Quantum affiliate Rockcliff Energy to support Williams' Louisiana Energy Gateway project (LEG). By connecting to premium Transco markets, the LEG project will gather the responsibly sourced natural gas produced in Haynesville. It will deliver it to industrial and LNG export markets along the Texas and Louisiana Gulf Coast
The LEG project was further strengthened with the signing of a Memorandum of Understanding between Williams and Quantum to establish a joint venture that will enable Quantum to become a partner and equity investor in the project. Williams will bring its expertise as a leading developer and operator of clean energy infrastructure together with Quantum's capacity as a global provider of private capital for responsible sourcing of energy and the transition to a low carbon economy.
For Williams, the opportunity to support Rockcliff's success and enable them to access growing markets represents a unique way to demonstrate how natural gas plays an essential role in reducing emissions, lowering costs, and providing reliable, secure energy to the US and around the world.
This partnership is also welcomed by Quantum, since working with exceptional entrepreneurs such as those from Trace and Rockcliff, who developed a strategic infrastructure platform with high ESG standards, has been at the foundation of Quantum’s success. This makes the Williams-Haynesville LEG partnership a crucial link between responsibly sourced Haynesville natural gas and the Gulf Coast's premium LNG markets.
If all regulatory approvals are received, the transaction should close by the end of the second quarter. RBC Capital Markets served as lead financial advisor to Williams; Citi served as lead financial advisor to Trace. Williams was represented by Davis Polk & Wardwell LLP; Trace was represented by Vinson & Elkins LLP.
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$690 Million Deal Moves Ahead: Crescent Energy to Complete Purchase of EP Energy's Uinta Assets
Crescent Energy closed the acquisition of Uinta Basin assets in Utah that were previously owned by EP Energy for $690 million, a few hundred million dollars below the original price. The accretive deal increases Crescent's Rockies position and adds significant cash flow and a portfolio of high-quality oil-weighted undeveloped sites. In addition to its acquired Uinta assets, Crescent's pro forma year-end 2021 provided reserves totaled 598 million boe, of which 83% was developed, 55% was liquid, and its provided PV-10 was $6.2 billion.
Major: Ameredev II Oil Producer to be Sold for $4 Billion by EnCap
In light of the conflict in Ukraine, buyout firms are currently scurrying to make cash from the U.S. crudeprices reaching their highest level since 2008. And one of the largest privately-owned US-based oilproducers may be up for sale. EnCap Investments looks to sell its portfolio company Ameredev II for over $4 billion including debt. It’s important to note, however, that both EnCap and Ameredev II alike are staying tight-lipped on the matter.
Kinetik Holdings recently announced a series of transactions in the energy sector. They struck a deal to buy Durango Permian infrastructure for $765 million. At the same time, they're selling their 16% share in the Gulf Coast Express Pipeline to ArcLight Capital Partners for $540 million. The total purchase cost includes $510 million in cash paid immediately and an additional $30 million that will be paid later, depending on whether they decide to expand further.
Recently, the Permian has seen significant acquisitions: Exxon Mobil purchased Pioneer Natural Resources for about $60 billion. Diamondback Energy's $26 billion deal to acquire Endeavor Energy Resources is currently on hold due to requests from the U.S. Federal Trade Commission. Occidental’s acquisition of CrownRock for $12 billion in the Midland.
EOG Resources is pushing boundaries in Ohio's Utica oil play and now drilling on the Sable pad, also located in Noble County. This site features the 3.7-mile lateral currently under construction. The company's first multi-well pads in the area Timberwolf and Xavier have each produced over 200,000 barrels of oil since their inception—Timberwolf in August and Xavier in October. A third site, the four-well White Rhino pad in Noble County, is also showing promising early results, according to Keith Trasko, EOG’s Senior Vice President of Exploration and Production, who noted the wells are performing as expected in their initial weeks.