EagleClaw Midstream, part of Blackstone Energy Partners, announced that it has entered into binding agreements to acquire Caprock Midstream Holdings from Energy Spectrum Capital and Caprock Midstream Management for $950 million plus pre-closing adjustments. The all-cash transaction is expected to close in 2018. EagleClaw’s current executive leadership team will lead the combined business, which will operate under the EagleClaw name.
EagleClaw is the largest privately held midstream operator in the Permian’s Delaware Basin in West Texas. The company’s assets are strategically located in Reeves, Ward, and Culberson counties and include more than 550 miles of natural gas and natural gas liquids pipelines and 720 MMcf/d of processing capacity.
Caprock is a privately held midstream operator that provides gathering, processing and disposal services for natural gas, crude oil, and produced water to producers in the Delaware Basin. Caprock currently operates two natural gas processing facilities and will have 540 MMcf/d of processing capacity pro forma for the completion of two additional facilities currently under construction. Caprock also operates almost 300 miles of gas, crude, natural gas liquids and water gathering pipelines.
“We are delighted to welcome Caprock’s customers and their employees into the EagleClaw team,” said Bob Milam, EagleClaw’s founder and CEO. “I have known and respected Mike Forbau, Caprock’s co-founder and CEO, for over 20 years. We look forward to building on the great footprint that Mike and the Caprock team have assembled to date and providing Caprock’s customers with best-in-class service consistent with our record of safe and reliable performance.”
Jamie Welch, EagleClaw’s President and CFO, added, “Following our recent announcement of the Permian Highway Pipeline in partnership with Kinder Morgan, the acquisition of Caprock is another exciting chapter in the continued growth story of EagleClaw. This transaction expands our business in every aspect, from asset footprint, to customer diversity, to breadth of service offering, while remaining true to EagleClaw’s core mission of providing customer-focused midstream services in the Permian basin.”
After the closing of the transaction, EagleClaw will operate close to 850 miles of natural gas, natural gas liquids, crude and water gathering pipelines; 1.3 billion cubic feet per day of processing capacity; and crude and water storage facilities, with over 425,000 acres under long-term dedication for midstream services.
As part of the transaction, the existing Caprock operating company (which will be renamed EagleClaw Midstream II) will be a sister-entity to the existing EagleClaw operating business (EagleClaw Midstream Ventures LLC) following the closing, under common ownership and management by the same corporate parent.