Noble Midstream and Greenfield Midstream Exercise Saddlehorn Option
February 04 2020 - 9:00AM
Business Wire
Highly accretive transaction backed by
contracted cash flows
Noble Midstream Partners LP (NASDAQ: NBLX) (the
“Partnership” or “Noble Midstream”) and Greenfield Midstream LLC
(“Greenfield Midstream”) have exercised the option to acquire a 20%
interest in the Saddlehorn Pipeline through their Black Diamond
Gathering LLC (“Black Diamond”) joint venture.
Highlights:
- Black Diamond acquired a 20% interest in the Saddlehorn
Pipeline for $155 million gross, or $84 million net to Noble
Midstream
- Expected to generate highly competitive returns and be leverage
neutral in 2020
- Diversifies Joint Venture into downstream, long-haul
opportunities and provides customer optionality to Cushing
The Saddlehorn Pipeline, which is jointly owned by affiliates of
Magellan Midstream Partners, L.P. (NYSE: MMP) (“Magellan”), Plains
All American Pipeline, L.P. (NYSE: PAA) (“Plains”) and Western
Midstream Partners, LP (NYSE: WES) (“WES”), is currently capable of
transporting approximately 190,000 barrels per day (Bbl/d) of crude
oil and condensate from the DJ and Powder River Basins to storage
facilities in Cushing, OK. Magellan serves as operator of the
Saddlehorn pipeline.
Following a successful open season, the Saddlehorn Pipeline is
expanding by 100,000 Bbl/d, to a new total capacity of 290,000
Bbl/d. The incremental capacity is expected to be available in late
2020 following the addition of incremental pumping and storage
capabilities. There will be no additional capital required by
Black Diamond for the expansion of the pipeline to 290,000
Bbl/d.
Backed by minimum volume commitments from high quality
producers, the Saddlehorn Pipeline acquisition provides Black
Diamond entry into high multiple, stable cash flows at a
competitive valuation. The acquisition is expected to
generate returns above organic capital options and bolster the
quality and diversification of the Partnership’s cash
flows.
With the pipeline online, Black Diamond anticipates cash
distributions from Saddlehorn in the first quarter 2020.
Noble Midstream expects the acquisition to be leverage neutral to
2020 credit metrics and is expected to pay for its share of the
acquisition through cash on hand and its revolving credit facility.
The effective date of the transaction was February 1, 2020;
Noble Midstream 2020 guidance included the Saddlehorn acquisition
and remains unchanged.
Commenting on the acquisition, Noble Midstream President and
Chief Operating Officer Robin Fielder said, “This accretive
transaction represents a rare opportunity to buy into a
largely-contracted pipeline with high-quality producers and
midstream operators. Saddlehorn strengthens the Black Diamond
position as the premier full-service crude transportation provider
in the DJ Basin and enhances the value proposition provided to our
customers. Further, this investment is anticipated to generate high
rates of return, provide diversification, and increase our exposure
to stable cash flow streams.”
Noble Midstream operates Black Diamond, which includes a
large-scale integrated crude oil gathering system in the DJ Basin,
consisting of approximately 240 miles of pipeline in operation,
300,000 Bbl/d delivery capacity and 390,000 Bbl/d crude oil storage
capacity. The system is connected to every major takeaway pipeline
in the DJ Basin, including the White Cliffs Pipeline, the
Saddlehorn Pipeline, the Grand Mesa Pipeline, and the Pony Express
Pipeline. Greenfield Midstream owns 45.6% of Black Diamond. Noble
Midstream and Greenfield Midstream jointly provide commercial
efforts to bring additional producer dedications to Black Diamond
Gathering and pursue expansion opportunities.
About Noble Midstream Partners LP
Noble Midstream is a growth-oriented master limited partnership
formed by Noble Energy, Inc., to own, operate, develop and acquire
domestic midstream infrastructure assets. Noble Midstream currently
provides crude oil, natural gas, and water-related midstream
services in the DJ Basin in Colorado and the Delaware Basin in
Texas. For more information, please visit www.nblmidstream.com.
About Greenfield Midstream, LLC
Greenfield Midstream is an independent energy company focused on
the development of midstream assets across North America. Based in
Houston, Greenfield is led by a seasoned management team with
strong commercial, technical and operational skills and a proven
track record of value creation for its stakeholders. Greenfield
Midstream is backed by growth capital from EnCap Flatrock
Midstream. For more information, please visit
www.greenfieldmidstream.com.
Cautionary Statements
This news release contains certain “forward-looking statements”
within the meaning of federal securities law. Words such as
“anticipates”, “believes”, “expects”, “intends”, “will”, “should”,
“may”, “estimates”, and similar expressions may be used to identify
forward-looking statements. Forward-looking statements are not
statements of historical fact and reflect the Partnership’s current
views about future events. No assurances can be given that the
forward-looking statements contained in this news release will
occur as projected and actual results may differ materially from
those projected. Forward-looking statements are based on current
expectations, estimates and assumptions that involve a number of
risks and uncertainties that could cause actual results to differ
materially from those projected. For further discussion of risks
and uncertainties, you should refer to those described under “Risk
Factors” and “Forward-Looking Statements” in the Partnership’s most
recent Annual Report on Form 10-K and in other reports we file with
the Securities and Exchange Commission. These reports are also
available from the Partnership’s office or website,
www.nblmidstream.com. Forward-looking statements are based on the
estimates and opinions of management at the time the statements are
made. Noble Midstream does not assume any obligation to update
forward-looking statements should circumstances, management’s
estimates, or opinions change.
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version on businesswire.com: https://www.businesswire.com/news/home/20200204005314/en/
Park Carrere Investor Relations Noble Midstream Partners (281)
872-3208 park.carrere@nblenergy.com
For Greenfield Midstream Casey Nikoloric TEN|10 Group (303)
507-0510 m (303) 433-4397 x 101 o
casey.nikoloric@ten10group.com
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