Nuevo Midstream Dos LLC announced March 20 it has entered into a definitive agreement with an affiliate of ArcLight Capital Partners to purchase Republic Midstream LLC. Republic Midstream owns and operates a crude oil gathering, storage and intermediate transportation system in the Eagle Ford Shale. The transaction is expected to close early in the second quarter of 2019. Nuevo Dos is backed by EnCap Flatrock Midstream.
Nuevo Dos plans to expand the system, which currently consists of approximately 100 miles of gathering pipeline that feeds a central delivery point with 300,000 barrels of crude oil storage and a six-bay truck station. The system also includes an approximately 26-mile intermediate pipeline that moves volumes from the delivery point to the Kinder Morgan Crude and Condensate Pipeline and the Eagle Ford Crude Oil Pipeline System, which is owned and operated by Enterprise. The Kinder Morgan and Enterprise pipelines deliver crude and condensate to multiple terminals with access to refineries, petrochemical plants and export terminals on the Texas Gulf Coast.
“We are very excited about this acquisition and the opportunity to expand the footprint and service offerings of the Republic system. We really like these assets and their location within the Eagle Ford,” said Nuevo Dos President and CEO Randy Ziebarth. “The Eagle Ford is experiencing a resurgence and is advantaged by its proximity to the Gulf. Nuevo Dos looks forward to helping producers fully participate in moving crude and condensate to market.”
“We have been partnering with the Nuevo team since 2011,” said EnCap Flatrock Vice President Zach Kayem, a member of the Nuevo Dos board of directors. “This is a team with a very successful track record of acquiring a system and developing its potential, as it did in the Permian. We’re looking forward to assisting the Nuevo Dos team with the acquisition and expansion of Republic’s Eagle Ford system.”
Locke Lord LLP is advising Nuevo Dos, with partner Bill Swanstrom and associate Jenelle Simmons in the lead roles from the firm’s Houston office. Swanstrom is co-chair of the firm’s energy practice group. Latham & Watkins, LLP is providing legal counsel to Republic Midstream in conjunction with the transaction, while Jefferies LLC served as exclusive financial adviser to ArcLight on the transaction.
U.S. oil rigs fell by one to 491 this week, while gas rigs rose four to 113, their highest since January 2020, according to the closely followed Baker Hughes report.
"This award reiterates GATE's position as the global leader in the energy transition,” Karthik Annadorai, executive vice president of GATE Energy, said.
The investment bank said key oil products markets are showing "steep backwardation and inventories that have fallen to low levels."