Energy Transfer and Sunoco LP have entered in a joint venture agreement that combines some of their crude oil and produced water gathering assets in the Permian Basin, the companies said July 16.
The JV will operate more than 5,000 miles of crude oil and water gathering pipelines with crude oil storage capacity in excess of 11 MMbbl. The JV’s reach will extend from Colorado City, Texas, in Mitchell County, through the Midland Basin and into the heart of the Delaware Basin, Lea County, New Mexico.
News of the comes a day after Energy Transfer completed its acquisition of WTG Midstream Holdings in a cash-and-stock trade valued at $3.18 billion.
Energy Transfer will serve as the operator of the JV and contribute its Permian crude oil and produced water gathering assets and operations to the partnership. Energy Transfer’s long-haul crude pipeline network provides transportation of crude oil out of the Permian Basin to Nederland, Houston and Cushing is excluded from the joint venture.
Sunoco, coming off its May deal to buy NuStar Energy for $7.3 billion, will contribute all of its Permian crude oil gathering assets and operations to the JV.
Energy Transfer will hold a 67.5% interest in the joint venture with Sunoco holding a 32.5% interest.
The formation of the joint venture has an effective date of July 1 and is expected to be immediately accretive to distributable cash flow per LP unit for both Energy Transfer and Sunoco.
Intrepid Partners LLC served as financial adviser to Energy Transfer’s conflicts committee, and Potter Anderson & Corroon LLP acted as Delaware counsel.
Guggenheim Securities LLC served as financial adviser to Sunoco’s special committee. Richards, Layton & Finger, P.A. acted as Delaware counsel for Sunoco’s special committee.
Vinson & Elkins LLP and Akin Gump Strauss Hauer & Feld LLP also acted as legal counsel to the partnerships on the transaction.
Recommended Reading
Permian Resources Closes $820MM Bolt-on of Oxy’s Delaware Assets
2024-09-17 - The Permian Resources acquisition includes about 29,500 net acres, 9,900 net royalty acres and average production of 15,000 boe/d from Occidental Petroleum’s assets in Reeves County, Texas.
Matador May Tap Its Haynesville ‘Gas Bank’ if Prices Stabilize
2024-10-24 - The operator holds 8,900 net Haynesville Shale acres and 14,800 net Cotton Valley acres in northwestern Louisiana, all HBP, that it would drill if gas prices stabilize—or divest for the right price.
Now, the Uinta: Drillers are Taking Utah’s Oily Stacked Pay Horizontal, at Last
2024-10-04 - Recently unconstrained by new rail capacity, operators are now putting laterals into the oily, western side of this long-producing basin that comes with little associated gas and little water, making it compete with the Permian Basin.
Northern’s O’Grady: Most of ‘Best’ Acres ‘Already Been Bought’
2024-10-24 - Adding new-well inventory going forward will require “exploration or other creative measures,” said Nick O’Grady, whose Northern Oil and Gas holds interests in 10,000 Lower 48 wells.
With Montney Production Set to Grow, US E&Ps Seize Opportunities
2024-10-02 - Canada’s Montney Shale play has already attracted U.S. companies Ovintiv, Murphy and ConocoPhillips while others, including private equity firms, continue to weigh their options.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.