LM Energy Holdings LLC entered definitive agreements to sell subsidiaries and assets related to its Touchdown Crude Oil Gathering System in Eddy and Lea counties, New Mexico. The buyer of the assets and financial details were not disclosed.

LM’s crude oil gathering assets include more than 130 miles of pipelines and two terminals with 136,000 bbl of storage capacity. The company began development in 2019 and has grown volumes to approximately 75,000 bbl/d.

Elliot Gerson, LM Energy’s CEO, said the “transaction positions LM as a stronger and even better capitalized company that is focused on our gas business.”

LM Energy has continued expanding its gas-gathering systems in Eddy and Lea. The systems provide low-pressure gathering, dehydration, compression, liquids handling and high-pressure gathering services. The company has constructed more than 70 miles of pipelines and will commission its sixth compressor station during fourth-quarter 2023.

“Gas volumes in the Northern Delaware Basin continue to outperform expectations, and meanwhile operators and regulators are increasing their focus on eliminating flaring. That combination creates a massive need for additional gas gathering and processing infrastructure,” Gerson said. “With our existing team, assets and relationships, we are extremely well positioned to continue growing our gas business.”

The Touchdown sale is to close during fourth quarter 2023.

Piper Sandler & Co. served as exclusive financial adviser and Kirkland & Ellis LLP served as legal counsel to LM Energy on the transaction.

Comments