EnLink takes key step in the Delaware Basin to Replicate the
Successful Strategy used in neighboring Midland Basin
The EnLink Midstream companies, EnLink Midstream Partners, LP
(NYSE:ENLK) (the Partnership) and EnLink Midstream, LLC (NYSE:ENLC) (the
General Partner) (together with its subsidiaries “EnLink”), today
announced that a subsidiary of the Partnership signed a definitive
agreement to acquire gathering and processing assets in the Delaware
Basin (the “Delaware Basin System”) from a subsidiary of Matador
Resources Company (NYSE:MTDR) (“Matador”) for approximately $143
million, subject to certain adjustments. The strategic acquisition
positions EnLink in the Delaware Basin as a full-service midstream
provider, with Matador as a high-quality producer customer. The
acquisition complements the Partnership’s crude oil gathering,
transportation and marketing services in the Delaware Basin region,
which EnLink entered into when it acquired LPC Crude Oil Marketing LLC
in February 2015.
The Delaware Basin System is located in Loving County, Texas, an area
with robust drilling activity, strong well results and significant
stacked pay potential. The Delaware Basin System’s assets include a
cryogenic gas processing plant with approximately 35 million cubic feet
per day (MMcf/d) of inlet capacity and approximately 6 miles of
high-pressure gathering pipeline, which connects a Matador-owned
low-pressure gathering system to the processing plant. Matador will be
the largest customer on the system and will dedicate approximately
11,000 gross acres currently under development pursuant to a 15-year,
fixed-fee gathering and processing agreement. The Delaware Basin System
has current inlet volumes of approximately 19 MMcf/d with two rigs
currently running on the dedicated acreage.
Including this acquisition, the Partnership expects to deploy growth
capital of approximately $400 – 500 million to expand its position in
the Delaware Basin over the next 18 months. It is anticipated that this
expansion will include additional processing capacity, including the
installation of a 120 MMcf/d natural gas processing plant currently
owned by the Partnership, and the construction of additional gathering
pipelines in Loving and Reeves Counties, Texas and Eddy and Lea
Counties, New Mexico.
“This transaction establishes EnLink as a full-service midstream
operator in the liquids-rich Delaware Basin, one of the most active
producing areas in the United States,” said Barry E. Davis, EnLink
President and Chief Executive Officer. “These assets are located in a
highly-attractive part of the Delaware Basin, providing us with an
immediate foothold in the region. We look forward to working with
Matador and other producers as we grow in one of the most promising
regions in our industry.
“We plan to replicate the successful growth strategy we have used in the
Midland Basin by expanding our presence both organically and through
acquisitions. The Delaware Basin and the entire Permian region will be a
significant area for future growth.”
Matador, an independent energy company engaged in the exploration,
development and production of oil and natural gas resources, is
currently focused on the Wolfcamp and Bone Spring formations across
Southeast New Mexico and West Texas.
Joseph Wm. Foran, Chairman and CEO of Matador, said, “We continue to be
pleased with our well results in the Delaware Basin, particularly in our
Wolf prospect area in Loving County where our wells continue to exceed
expectations. These strong results, coupled with the sustainable
drilling and completion efficiencies we have achieved, give us the
confidence to remain active even in today’s challenged commodity price
environment. We look forward to working with EnLink as a midstream
partner in the region.”
The transaction value represents a multiple of approximately seven to
eight times adjusted EBITDA of the Delaware Basin System in three to
four years, taking into consideration expected additional capital
investments of approximately $250 - 350 million. The Delaware Basin
System is currently in start-up operations.
The transaction is expected to close in the fourth quarter and is
subject to customary regulatory approvals and closing conditions.
About the EnLink Midstream Companies
EnLink Midstream is a leading, integrated midstream company with a
diverse geographic footprint and a strong financial foundation,
delivering tailored customer solutions for sustainable growth. EnLink
Midstream is publicly traded through two entities: EnLink Midstream,
LLC (NYSE: ENLC), the publicly traded general partner entity, and EnLink
Midstream Partners, LP (NYSE: ENLK), the master limited partnership.
EnLink Midstream’s assets are located in many of North America’s premier
oil and gas regions, including the Barnett Shale, Permian
Basin, Cana-Woodford Shale, Arkoma-Woodford Shale, Eagle Ford Shale,
Haynesville Shale, Gulf Coast region, Utica Shale and Marcellus Shale.
Based in Dallas, Texas, EnLink Midstream’s assets include over 9,200
miles of gathering and transportation pipelines, 16 processing plants
with 3.6 billion cubic feet per day of processing capacity, seven
fractionators with 280,000 barrels per day of fractionation capacity, as
well as barge and rail terminals, product storage facilities, purchase
and marketing capabilities, brine disposal wells, an extensive crude oil
trucking fleet and equity investments in certain private midstream
companies.
Additional information about the EnLink companies can be found at www.enlink.com.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the federal securities laws. These statements are based on
certain assumptions made by the Partnership and the General Partner
based upon management's experience and perception of historical trends,
current conditions, expected future developments and other factors the
Partnership and the General Partner believe are appropriate in the
circumstances. These statements include, but are not limited to,
statements about future financial and operating results, opportunities,
objectives, expectations and intentions that are not historical facts.
Such statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of the Partnership
and the General Partner, which may cause the Partnership's and the
General Partner’s actual results to differ materially from those implied
or expressed by the forward-looking statements. These risks include, but
are not limited to, the failure to consummate the transaction, the
failure to enter into the gathering and processing agreement with
Matador, the risk that the assets to be acquired will not be
successfully integrated or that such integration will take longer than
expected, the risk that the assets to be acquired will not perform as
expected, the failure of the assets to be acquired to generate follow-on
investment opportunities, the failure to achieve expected synergies,
regulatory, economic and market conditions and other risks discussed in
the Partnership's and the General Partner’s filings with the Securities
and Exchange Commission. The Partnership and the General Partner have no
obligation to publicly update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise.
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