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Rattler Midstream Closes Acquisition of Reliance Gathering
Friday 15 November 2019

15 November 2019 - A joint venture of US-based oil and natural gas company Diamondback Energy, Inc.'s (NASDAQ: FANG) Rattler Midstream LP (NASDAQ: RTLR) subsidiary and Oryx Midstream has closed the acquisition of Reliance Gathering, LLC for approximately USD 356m in cash, the companies said.
Oryx Midstream is a portfolio company of Stonepeak Infrastructure Partners.
The deal covers a crude oil gathering system that includes over 230 miles of gathering and regional transportation pipelines and approximately 200,000 barrels of crude oil storage in Midland, Martin, Andrews, and Ector counties.
Current system throughput is over 110,000 barrels per day from six substantial oil and gas operators, including Diamondback and other top-tier operators.
Over 160,000 gross acres in Northern Midland Basin is dedicated under long-term, fixed-fee agreements, some of which benefit from minimum volume commitments.
Diamondback operates approximately 38% of the dedicated acreage and produced approximately 35% of the volumes on the system in 2019 through July. Oryx will operate the system following closing.
Rattler owns 60% of the joint venture and funded its portion of the acquisition price with cash on hand and borrowings under its revolving credit facility.
Rattler Midstream is a growth-oriented Delaware limited partnership formed in July 2018 by Diamondback Energy, Inc. to own, operate, develop and acquire midstream infrastructure assets in the Midland and Delaware Basins of the Permian Basin.
Rattler provides crude oil, natural gas and water-related midstream services (including fresh water sourcing and transportation and saltwater gathering and disposal) to Diamondback under long-term, fixed-fee contracts.
Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas.
Midland-based Oryx Midstream is the largest privately-held midstream crude operator in the Permian Basin. The company owns and operates a crude oil gathering and transportation system underpinned by over one m and two hundred thousand acres under long-term dedications from approximately 30 customers.
The system's 2.1m barrels of storage and approximately 1,300 miles of in-service pipeline span ten counties in Texas and two in New Mexico.
Stonepeak Infrastructure Partners is an infrastructure-focused private equity firm with over USD 16bn of assets under management and with offices in in Houston, New York, and Austin.
Stonepeak invests in long-lived, hard-asset businesses and projects that provide essential services to customers, and seeks to actively partner with high-quality management teams, facilitate operational improvements, and provide capital for growth initiatives.
Jefferies LLC is acting as exclusive financial advisor, and Sidley Austin LLP is acting as legal counsel to Reliance Gathering in connection with the transaction. Akin Gump Strauss Hauer and Feld LLP is acting as legal counsel to Rattler. Shearman and Sterling LLP is acting as legal counsel to Oryx.
Date Published: 15/11/2019
Target: Reliance Gathering
Country: USA
Deal Size: 356m (USD)
Sector: Petroleum/Natural Gas/Coal
Type: JV
Financing: Cash
Status: Closed
Buyer: Rattler Midstream, Oryx Midstream
Buyer Advisor: Akin Gump Strauss Hauer and Feld , Shearman and Sterling
Rattler owns 60% of the joint venture and funded its portion of the acquisition price with cash on hand and borrowings under its revolving credit facility