Comprehensive Energy Data Intelligence
Information About Energy Companies, Their Assets, Market Deals, Industry Documents and More...
Shell's Midstream Assets in TX and LA (Gulf area)
11/18/2022
On July 25, Shell USA, Inc. and Shell Midstream Partners, LP (SHLX) signed an agreement and plan of merger.
The transaction was anticipated closing in the fourth quarter of this year, subject to customary closing conditions. A subsidiary of Shell USA, as the holder of a majority of the outstanding SHLX common units, has delivered its consent to approve the transaction concurrently with the execution of the Merger Agreement.
On October 19, Shell USA completed the almost $1.96 billion acquisition of the master limited partnership. The company paid $15.85 in cash for every common unit representing limited partner interests in SHLX not held by Shell USA or its affiliates. A subsidiary of Shell USA has 269,457,304 SHLX common units or roughly 68.5% of SHLX common units.
SHLX's assets include interests in entities that own crude oil and refined products pipelines and terminals that serve as key infrastructure to transport onshore and offshore crude oil production to U.S. Gulf Coast and Midwest refining markets. They convey refined products from those markets to major demand centers, as well as storage tanks and financing receivables that are secured by pipelines, storage tanks, docks, trucks, rail racks, and other infrastructure used to stage and transfer intermediate and finished products.
Shell Midstream commenced trading in October 2014 via an upsized initial public offering with a price, which was higher than predicted. The IPO rose $920 million before underwriters exercised their overallotment option, which ended up bringing the total to $1.06 billion.
After the MLP was created, Shell’s midstream assets lost billions of dollars worth. The MLP's assets included interests in entities that own crude oil and refined products pipelines and terminals in and around the Gulf Coast and Midwest regions and interests in entities that own natural gas and refinery gas pipelines in the Gulf Coast region.
In previous years, many U.S. pipeline companies had their subsidiaries structured in this popular for of the master limited partnership. Shell PLC effectively came to consolidate its MLPs in similar transactions being the latest in this among othe energy giants.
In December 2020, Calgary-based TC Energy Corp., formerly TransCanada, announced a roll-up to purchase the publicly held units of TC PipeLines LP in an all-stock deal, which was completed in March 2021.
San Ramon, California-based Chevron Corp., which has a significant presence in Houston, finished its acquisition of Houston-based Noble Midstream Partners LP in May 2021. Chevron had already inherited a majority stake in the MLP when it got Houston-based Noble Energy in 2020.
Most recently, Houston-based Phillips 66 bought all limited partnership interests in Phillips 66 Partners that it did not already own. That all-stock deal, which was estimated at $3.4 billion when it was announced in October 2021, closed on March 9, making the MLP a wholly-owned subsidiary of Phillips and simplifying the overall company governance and corporate structure.
Barclays Capital Inc. and Evercore Group L.L.C. acted as financial advisors to Shell USA; Baker Botts L.L.P. acted as Shell USA's legal counsel, and Richards, Layton & Finger, PA acted as special Delaware counsel to Shell USA on the Transaction. Intrepid Partners, LLC acted as financial advisor to the Conflicts Committee and Gibson, Dunn & Crutcher LLP acted as the Conflicts Committee's legal counsel on the Transaction.
For the Shell Midstream deal, Shell USA was represented by Barclays Capital Inc. and Evercore Group LLC as financial advisers, Baker Botts LLP as legal counsel, and Richards, Layton & Finger PA as special Delaware counsel. Intrepid Partners LLC acted as financial adviser to the conflicts committee, and Gibson, Dunn & Crutcher LLP acted as the conflicts committee's legal counsel.
If you are looking for more information about energy companies, their assets, and energy deals, please, contact our sales office mapping@hartenergy.com, Tel. 619-349-4970 or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.
Louisiana: in Top U.S. NG Producing States. Some Grow Faster
Louisiana has a share of 6.6% of national NG production. Its production decline reflects growth shifting to Pennsylvania and Ohio.
Let’s Take a Step Into The Future: Water Management
As demands for water management solutions increase, service companies are looking for new ways to optimize their ability to recycle and store this water.
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.