Friday 21 January 2022

Texas-based midstream company Clearfork Midstream LLC has agreed to acquire Texas-based Azure Midstream Energy, to enter core areas of the Haynesville Shale in North Louisiana and East Texas, the company said.

Clearfork has secured a capital commitment from EnCap Flatrock Midstream to purchase Azure Midstream. The transaction is subject to standard regulatory approvals and is expected to close during 1Q22.

Additional terms were not disclosed.

Azure Midstream's natural gas gathering and treating platform spans the core areas of the Haynesville Shale formation and includes more than 500 miles of pipeline and 1.2bn cubic feet per day of treating capacity across systems in North Louisiana and East Texas.

Clearfork's management said it believes natural gas is an essential component of energy supply and CO2 reduction targets in the US and internationally, and the Haynesville Shale will continue to represent a reliable and long-term source of natural gas supply to the world.

Clearfork plans to invest additional capital following the acquisition to optimise the efficiency of Azure Midstream's systems in support of existing customers and to pursue additional acreage dedications, throughput volumes, and regional infrastructure.
Latham and Watkins LLP served as legal adviser to EnCap Flatrock Midstream on the equity commitment with Partner James M. Garrett in the lead role. Vinson and Elkins LLP served as legal adviser to Clearfork on both the equity commitment and the acquisition of Azure Midstream. Partner Matthew Falcone led the firm's legal team.

Donovan Ventures served as financial adviser to Clearfork regarding the Azure acquisition. Jefferies was financial adviser and Porter Hedges LLP was legal adviser to Azure.

Clearfork Midstream, LLC is a growth-oriented midstream company that provides comprehensive midstream solutions for oil and gas producers in basins across North America, with a specific emphasis on unconventional natural gas production in the Haynesville/Bossier Shale formation in North Louisiana and East Texas.

Clearfork is backed by a USD 400m equity commitment from EnCap Flatrock Midstream.