Brazos Midstream recently expanded its footprint in the Permian Basin with two significant transactions with Diamondback Energy Inc. and its midstream affiliate.
Headquartered in Fort Worth, Texas, Brazos is one of the largest private natural gas and crude oil midstream companies in the Delaware Basin of the Permian. However, on Nov. 3, the company said it has now expanded to the Midland Basin through the acquisition of Diamondback’s Mustang Springs Gas Gathering System, marking Brazos’ first acquisition on the Midland Basin side of the Permian.
The acquisition of the Mustang Springs Gas Gathering System located in the Northern Midland Basin was made through the company’s newly formed affiliate Brazos Midland. Diamondback reported net consideration of approximately $54 million from the sale of the Mustang Springs Gas Gathering assets.
“We are also very pleased to form Brazos Midland to complete the acquisition of a high-quality asset supported by Diamondback’s strong existing production and robust development plans, which provides a great platform in the core of the Midland Basin with tremendous potential for third-party growth,” Brazos CEO Brad Iles commented in a company release on Nov. 3.
The Mustang Springs Gas Gathering System currently serves Diamondback in central Martin County, Texas. Brazos plans to expand the system to serve both Diamondback and other producers’ “significant growth plans in the area,” according to the company release.
“We look forward to continued growth across a broader Permian platform,” Iles added in the release.
On Nov. 3, Brazos Midstream also announced the acquisition of the Pecos Gas Gathering System in the southern Delaware Basin from Diamondback Energy and its midstream affiliate Rattler Midstream.
Brazos has operated the Pecos Gas Gathering System on behalf of Diamondback and Rattler since 2017.
“The Pecos system is a perfect bolt-on acquisition for our existing Delaware Basin business and will allow Brazos to extend our reach to new producer customers,” Iles said.
In a separate release on Nov. 3, Rattler said it had closed the sale of its Pecos County gas gathering assets to Brazos Midstream for gross potential consideration of $93 million, including $83 million of cash at closing.
The Pecos Gas Gathering System will add an additional 150 miles of natural gas gathering pipeline and four associated compressor stations, complementing Brazos’ existing high pressure natural gas gathering system and cryogenic processing complex located in Reeves County, Texas. Brazos also plans to expand the Pecos system to provide additional gas gathering and processing services for Diamondback’s ongoing development plus connections to new third-party producers in the area.
According the release, Brazos Midstream’s Delaware Basin assets include over 800 miles of intrastate natural gas, NGL and crude oil gathering pipelines, a natural gas processing complex with 460 MMcf/d of processing capacity and approximately 75,000 barrels of crude oil storage. The company’s Delaware assets—located in Reeves, Ward, Loving, Winkler and Pecos counties, Texas—serve leading major and independent oil and gas producers, which together have made long-term dedications for over 500,000 acres.
Brazos Midstream had originally partnered at its formation with Old Ironsides Energy LLC but later agreed to sell its Delaware Basin subsidiaries to North Haven Infrastructure Partners II, an investment fund managed by Morgan Stanley Infrastructure, in 2018 for approximately $1.75 billion in cash.
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