HEADLINES: Permian Deals Dominate Week
Hart Energy’s editorial offices were jumping late Wednesday afternoon covering a flurry of deals, led by two Permian transactions. Diamondback Energy will acquire Ajax Resources in a cash-and-stock deal worth roughly $1.25 billion. Hart Energy’s Emily Patsy reports, Diamondback will add top-tier horizontal drilling locations across three zones in the Northern Midland Basin as part of the acquisition. The position is located in Northwest Martin and Northeast Andrews counties in West Texas. Diamondback will also pick up midstream infrastructure from Ajax.
Apache Corp. will contribute its midstream assets at Alpine High to Altus Midstream, a $3.5 billion pure-play, Permian Basin Midstream c-corp. That is the result of an agreement between Apache and Kayne Anderson. As Hart Energy’s Terrance Harris reports, Apache will own approximately 71% of Altus Midstream with the ability to increase to about 74%, subject to performance earn outs. Altus will own options for equity participation in five planned pipelines from the Permian Basin to various points along the Texas Gulf Coast.
Occidental Petroleum agreed to two asset sales to EnCap Flatrock Midstream portfolio companies for about $2.6 billion. Moda Midstream entered into a definitive agreement to acquire Oxy’s Ingleside Energy Center and certain crude oil and LPG infrastructure. Lotus Midstream agreed to acquire Oxy’s Centurion pipeline system and a Southeast New Mexico crude oil gathering system.
Across the world in China, tariff rhetoric kept heating up, this time over LNG with the country threatening a 25% tariff on U.S. imports. While some analysts say the tariffs could lessen the competitiveness of U.S. LNG export to china, others told Hart Energy’s Joe Markman that would not mean Gulf Coast export terminals would need to close up shop any time soon. Stratas Advisors’ George Popps said the export price has been so low, even with the 25% tariff U.S. LNG should still be competitive.