Denver-based company to sell natural gas and crude oil midstream
systems in prolific Delaware and Midland Basins with over 250,000
dedicated acres
Outrigger Energy LLC (“Outrigger”) and certain of its partners and
affiliates, today announced the signing of definitive agreements with a
subsidiary of Targa Resources Corp. (“Targa”) whereby Targa has agreed
to acquire Outrigger’s three midstream subsidiaries in the Permian Basin
(“Outrigger Permian”) for cash consideration of up to $1.5 billion,
subject to certain adjustments. Outrigger Permian includes natural gas
gathering and processing and crude oil gathering systems spanning
Loving, Winkler, Ward, Reeves and Pecos Counties, Texas in the Delaware
Basin (“Outrigger Delaware”), and Martin, Howard and Borden Counties,
Texas in the Midland Basin (“Outrigger Midland”).
Dave Keanini, Outrigger’s President & CEO, stated, “We are very pleased
with the midstream systems we’ve developed in the Midland and Delaware
Basins and this transaction with Targa represents a great outcome for
our customers, employees, and investors. The success of this transaction
is a testament to Outrigger’s ability to develop midstream solutions for
our producer customers and diligently execute these projects to ensure
high quality midstream infrastructure is in place to serve them.” Mr.
Keanini continued, “with our systems located in the highest growth areas
of the Midland and Delaware Basins, it was extremely important for us to
transfer our assets to a midstream company that has the experience,
staffing, and resources to accommodate the growth rates these systems
will experience over the next several years. We have complete confidence
in Targa’s ability to exceed those expectations and believe our
customers will be in very capable hands going forward.”
“Dave Keanini, Amit Jhunjhunwala and the full Outrigger team have been
exceptional partners,” said James Cunningham, Managing Director at
Denham Capital. “This team has developed a series of great assets in a
highly competitive marketplace and we’re excited to announce this
transaction and the value created for our investors. We look forward to
continuing our partnership with the Outrigger team and building on this
success.”
Outrigger Permian Assets
Outrigger Delaware includes over 140 miles of natural gas gathering
pipeline, 70 MMcfd of cryogenic processing capacity in Loving County,
Texas and crude gathering infrastructure with 40,000 barrels of oil per
day of capacity. The transaction also includes Outrigger’s Southern
Delaware system that is currently under construction and will provide
area customers with access to the Waha Hub.
Outrigger Midland includes over 100 miles of natural gas gathering
pipeline, 10 MMcfd of cryogenic processing capacity in Martin County,
Texas and a crude gathering system with 40,000 barrels per day of
capacity.
Transaction Detail
Under the terms of the agreements, Outrigger and its affiliates will
receive initial cash consideration of $565 million after closing of the
transaction. In addition, Targa will pay additional cash consideration
of up to $935 million in 2018 and 2019 based on the achievement of
certain performance-linked measures tied to Outrigger Permian’s existing
contracts. The transaction, which is expected to close in the first
quarter 2017, is subject to customary regulatory approvals and other
closing conditions
Advisors
Citi is serving as exclusive financial adviser and Vinson & Elkins LLP
as legal counsel to Outrigger.
About Outrigger Energy LLC
Based in Denver, Colo., Outrigger Energy is a private, full service
midstream energy company specializing in greenfield project development
with a focus in liquid-rich natural gas and crude oil basins in the
Permian Basin of West Texas, the Rockies, and Mid-Continent areas.
Outrigger will retain its Powder River Basin assets and management will
continue to pursue new midstream opportunities in the Permian Basin and
other areas across North America. Outrigger is supported by its equity
partners, Denham Capital and Brion G. Wise. For more information about
Outrigger, visit www.outriggerenergy.com.
About Denham Capital
Denham Capital is a leading energy-focused global private equity firm
with more than $8.4 billion of invested and committed capital across
eight fund vehicles. The firm makes direct investments across all stages
of the corporate lifecycle. Denham’s investment professionals apply deep
operational and industry experience and work in partnership with
management teams to achieve long-term investment objectives. For more
information about Denham Capital, visit www.denhamcapital.com.
About Brion G. Wise
Brion G. Wise is a private investor and has over 35 years of experience
in the oil and gas industry. Mr. Wise founded Western Gas Resources,
Inc. in 1971 and served the company in various executive and board
positions until its sale to Anadarko Petroleum Corp. in 2006 for $5.3
billion.
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