Altus Midstream Company (“Altus”) (NASDAQ: ALTM) today announced
that Altus Midstream LP (“Altus Midstream”) has entered into
definitive agreements to issue $625 million of preferred equity in
a private placement and amend its credit facility, which will allow
Altus Midstream’s revolver capacity to increase to $650 million
during the Initial Period (as defined in Altus Midstream’s credit
agreement), an increase of $200 million.
“Upon closing the preferred equity financing, the amended
revolver and preferred equity will satisfy our needs for external
capital for the foreseeable future,” said Clay Bretches, Altus CEO
and president. “This incremental financing will facilitate our
ability to efficiently finance the exercise of all three remaining
JV pipeline equity options, two of which we plan to exercise in
2019 – the Permian Highway natural gas pipeline and the Shin Oak
NGL pipeline, as well as our gathering and processing
business.”
“Following an extensive and competitive process, we chose to
issue private preferred equity at Altus Midstream, a deal in which
we are pleased to partner with outstanding investors led by
Magnetar Capital and The Carlyle Group’s Energy Mezzanine
Opportunities team. This financing, along with our amended
revolver, confirms that our gathering and processing assets and JV
pipelines are highly valued for their ability to deliver long-term
returns for our investors,” said Ben Rodgers, Altus chief financial
officer. “Upon closing, these financings will provide us with
significant incremental liquidity with pricing and terms that are
competitive with recent comparable transactions in the midstream
space. They also solidify our financing outlook by funding our
planned growth projects without issuing additional common equity or
warrants.”
Preferred Equity
The preferred equity will have a 7 percent per annum
distribution rate, payable quarterly with a payment-in-kind option
at Altus Midstream’s discretion for the first six quarters. The
preferred equity will be redeemable at any time by Altus Midstream
based on delivering the greater of an 11.5 percent internal rate of
return (IRR) and 1.3x multiple of invested capital. The
distribution rate and IRR thresholds increase to the extent the
preferred equity is outstanding after five years. Closing and
funding of the preferred equity financing is expected to occur by
June 28, 2019, subject to customary closing conditions.
The lead preferred equity investors are Magnetar Capital and The
Carlyle Group’s Energy Mezzanine Opportunities team. Other
supporting investors include certain funds or accounts managed by
affiliates of Apollo Capital Management, L.P., FS Energy and Power
Fund, as advised by a joint venture of FS Investments and EIG
Global Energy Partners, funds managed by Tortoise Capital Advisors,
L.L.C., Salient Capital Advisors, LLC and Yaupon Capital
Management. Credit Suisse and J.P. Morgan served as joint placement
agents to Altus Midstream in connection with the private placement
of preferred equity.
Amended Credit Facility
Altus Midstream’s bank group features 100 percent crossover with
the bank group of Apache Corporation (NYSE, NASDAQ: APA), which,
through direct and indirect interests, owns 79 percent of Altus
Midstream. Under the amended revolver, at the time Altus Midstream
receives funds for at least $500 million of preferred equity,
commitments during the Initial Period will increase by $200 million
to a total of $650 million. Altus Midstream expects to exit the
Initial Period later this year, which, per the terms of the
existing agreement, will allow for an increase in borrowing
capacity to $800 million.
Investor Presentation
Additional information is available in an updated investor
presentation posted to Altus’ website at
www.altusmidstream.com.
About Altus Midstream Company
Altus Midstream Company is a pure-play, Permian-to-Gulf Coast
midstream C-corporation. Through its consolidated
subsidiaries, Altus owns substantially all of the
gas gathering, processing and transportation
assets servicing Apache Corporation’s
production in the Alpine High play in the Delaware
Basin and owns, or has the option to own, joint venture equity
interests in five Permian Basin pipelines, four of which go to
various points along the Texas Gulf Coast. Altus posts
announcements, operational updates, investor information and press
releases on its website, www.altusmidstream.com.
Forward-Looking Statements
This news release includes certain statements that may
constitute “forward-looking statements” for purposes of the federal
securities laws. Forward-looking statements include, but are not
limited to, statements that refer to projections, forecasts or
other characterizations of future events or circumstances,
including any underlying assumptions. The words “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “intends,”
“may,” “might,” “plan,” “seeks,” “possible,” “potential,”
“predict,” “project,” “guidance,” “outlook,” “should,” “would,”
“will,” and similar expressions may identify forward-looking
statements, but the absence of these words does not mean that a
statement is not forward-looking. These statements include, but are
not limited to, statements about future plans, expectations, and
objectives for Altus’, Altus Midstream’s, and/or Apache’s
operations, including statements about our strategy, future
operations, financial position, estimated revenues and losses,
projected costs, prospects, plans, and objectives of management.
While forward-looking statements are based on assumptions and
analyses made by us that we believe to be reasonable under the
circumstances, whether actual results and developments will meet
our expectations and predictions depend on a number of risks and
uncertainties which could cause our actual results, performance,
and financial condition to differ materially from our expectations.
See "Risk Factors" in our Annual Report Form 10-K for the fiscal
year ended December 31, 2018, filed with the Securities
and Exchange Commission for a discussion of risk factors that
affect our business. Any forward-looking statement made by us in
this news release speaks only as of the date on which it is made.
Factors or events that could cause our actual results to differ may
emerge from time to time, and it is not possible for us to predict
all of them. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future development or otherwise, except as may be required by
law.
Contacts
Investors: |
|
(281) 302-2286 Gary Clark |
Media: |
|
(713) 296-7276 Phil West |
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