US-based midstream energy company Cardinal Midstream Partners has agreed to acquire natural gas gathering and processing business in the Delaware Basin in West Texas from Medallion Midstream Services.
Under the agreements, Cardinal will purchase the midstream infrastructure including natural gas gathering and processing solutions in the heart of the Delaware Basin.
The transaction includes approximately 80 miles of high- and low-pressure natural gas gathering pipelines and a 140 million cubic feet per day (/d) natural gas processing facility.
Cardinal CEO Doug Dormer said: “This acquisition in the prolific Delaware Basin will serve as the cornerstone of Cardinal’s natural gas gathering and processing business strategy.
“The business is an ideal fit to leverage our team’s core competencies and industry relationships. We look forward to expanding the asset base and providing meaningful midstream solutions to serve area producers’ growth.”
The transaction is subject to customary closing conditions and is planned to close in early 2023.
EnCap Flatrock managing partner and founder Billy Lemmons said: “Cardinal was the first management team we backed when we formed EnCap Flatrock in 2008 and Doug has been an incredible partner.”
Shearman & Sterling and Locke Lord are serving as legal advisors to Cardinal and Medallion, respectively.
Medallion Midstream’s Midland Basin operations include approximately 1,200 miles of regulated and non-regulated crude oil gathering and transportation pipelines.
Earlier this year, Cardinal received $300m in initial capital commitment from EnCap Flatrock Midstream to pursue acquisition and development opportunities in prolific basins in North America.
