Enterprise to acquire Navitas Midstream

An affiliate of Enterprise Products Partners agreed to acquire Navitas Midstream Partners from an affiliate of Warburg Pincus in a debt-free transaction for $3.25 billion in cash consideration.

Navitas Midstream provides natural gas gathering, treating and processing services in the core of the Midland Basin of the Permian, in the southwestern U.S. Navitas Midstream’s assets include about 1,750 miles of pipelines and over 1 billion cu. ft. per day of cryogenic natural gas processing capacity with the completion of the Leiker plant, which is expected in the first quarter of 2022.

Enterprise says the acquisition provides its natural gas processing and natural gas liquids (NGL) business with an entry point into the Midland Basin. Drilling activity in the Midland Basin currently represents about 20 percent of active onshore drilling rigs in the U.S., according to the company. The system is anchored by long-term contracts and acreage dedications with a diverse group of over 40 independent and publicly owned producers.

Navitas Midstream provides visibility to future growth with up to 10,000 drilling locations, or over 15 years of drilling inventory based on current rig counts, on the dedicated acreage, Enterprise notes. The system is supported by fee-based contracts that provide additional revenues based on commodity prices.

“The Delaware and Midland basins are the two most attractive regions in the U.S. in terms of crude oil, natural gas and NGL reserves, with each having up to nine geologic horizons,” says A.J. “Jim” Teague, co-CEO of Enterprise’s general partner. “We do not have a natural gas or NGL presence in the Midland Basin other than downstream pipelines. This acquisition will give us an entry point into the basin.”

Adds Randy Fowler, co-CEO and CFO of Enterprise’s general partner, “The system, including its large footprint of low pressure natural gas gathering, is an attractive processing franchise that provides value-added services to producers.”

Enterprise expects to fund the transaction using cash on hand and borrowings under the partnership’s existing commercial paper and bank credit facilities, and finalize it in the first quarter of 2022.

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