Devon Energy will sell its 12.5% stake in the Matterhorn Express following a report that I Squared Capital was interested in buying a majority stake in the pipeline. (Source: Shutterstock.com)
Devon Energy has agreed to sell its equity stake in the Matterhorn Express Pipeline, the company said May 6.
The buyer was not named in the announcement, which Devon included in its press release for its quarterly earnings report.
On May 3, Reuters reported that I Squared Capital was in talks to buy a majority stake of the line’s ownership, according to anonymous sources. The report said it was unclear how I Squared would put together its stake.
Devon said it will keep its contracted natural gas capacity on the Matterhorn. The divestiture comes as Devon works to boost annual pretax cash flow by $1 billion through a series of cost-reduction efforts. That included enhancing midstream commercial contracts, increasing realizations and lowering its cost structure to cut $300 million in spending, the company said in April. .
The Matterhorn Express is a 2.5 Bcf/d, 580-mile line from the Permian Basin to Southeast Texas. The line began operations on Oct. 1 and has ramped up flows faster than expected, according to reports from East Daley Analytics.
The Matterhorn is a joint venture among multiple parties. Operator WhiteWater holds a 67.5% stake. EnLink, which is owned by ONEOK, has a 15% stake. MPLX has a 5% stake, and Devon owns a 12.5% stake.
Devon said proceeds from the sale, expected to close in the second quarter, will be used to strengthen the company’s financial position. .
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