Noble Midstream and Greenfield Midstream Provide Black Diamond Gathering Commercial Update
August 29 2019 - 8:30AM
Business Wire
Noble Midstream Partners LP (NYSE: NBLX) (the
“Partnership” or “Noble Midstream”) and Greenfield Midstream LLC
(“Greenfield Midstream”) provided a commercial and business
development update for its Black Diamond Gathering LLC (“Black
Diamond”) joint venture. Black Diamond provides crude oil gathering
and storage services to producers in the Denver Julesburg Basin
(“the DJ Basin”).
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the full release here:
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- Black Diamond has entered into a new strategic relationship
with Saddlehorn Pipeline Company, LLC (“Saddlehorn”), including an
option for up to a 20% ownership in Saddlehorn
- Black Diamond added a long-term oil gathering dedication from
Verdad Resources LLC (“Verdad Resources”), increasing Black Diamond
dedicated acres by approximately 85,000 acres, or 54%.
Saddlehorn Investment
Option
As part of such strategic relationship, Black Diamond and Noble
Energy Inc. made commitments during Saddlehorn’s recent open
season. Black Diamond’s investment option expires in April
2020.
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 thousand barrels per day (MBbl/d) of
crude oil and condensate from the DJ and Powder River Basins to
storage facilities in Cushing, Oklahoma owned by Magellan and
Plains. With the recent successful open season, the Saddlehorn
Pipeline will be expanded by 100 MBbl/d, to a new total capacity of
290 MBbl/d. The higher capacity is expected to be available in late
2020 following the addition of incremental pumping and storage
capabilities. Magellan serves as operator of the Saddlehorn
pipeline.
Upon an option exercise by Black Diamond, Magellan and Plains
would each sell-down their equity interests in the Saddlehorn
Pipeline to Black Diamond on an equal 10% basis while WES would
retain its 20% equity ownership.
Commenting on the announcement, Noble Midstream Chief Executive
Officer Brent Smolik said, “Saddlehorn is an important long-haul
outlet from the DJ and Powder River Basins with premier midstream
equity partners and commitments from high-quality producers. This
opportunity is a natural expansion of Black Diamond’s strategic
footprint, with the ability to realize economics further down the
crude oil value chain while enhancing the all-in value proposition
for our customers. In addition, the new open season TSAs signed by
Noble Energy and Black Diamond will include a tariff reduction to
transport barrels to Cushing. We are excited by another potential
long-haul pipeline investment and believe this opportunity reflects
our strategic advantage and differentiated playbook for long-term
growth and value creation.”
Long-Term Oil Gathering Dedication to
Black Diamond
In addition, Black Diamond has secured a 15-year oil gathering
dedication from Verdad Resources. The dedication encompasses
approximately 85,000 acres and more than 750 potential drilling
locations in the DJ Basin in southern Weld County, Colorado. This
increases the total acreage dedicated to the Black Diamond system
to approximately 243,000 acres.
Seven rigs are currently running on the Black Diamond dedicated
acreage, including one rig on the Verdad acreage. Initial Verdad
well connections are anticipated in early 2020. Black Diamond
anticipates modest capital requirements in 2019 from the new
gathering opportunity which can be absorbed within existing 2019
capital guidance provided at the Partnership’s second quarter
earnings due to sustainable cost savings achieved this year.
“I’m extremely pleased to add a new customer and meaningful
acreage dedication to our system. This is another testament to
Black Diamond’s strong competitive position in the DJ Basin as well
as the differentiated value proposition we provide our customers.
These positive commercial developments enhance the resiliency and
long-term potential of this premier oil gathering platform,” said
Smolik.
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
MBbl/d delivery capacity and 390 MBbl/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.
The Partnership’s 54.4% ownership of Black Diamond is held through
its wholly owned subsidiary, Laramie River DevCo LP. Greenfield
Midstream owns 45.6% of Black Diamond.
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/20190829005159/en/
Megan Repine Investor Relations Noble Midstream Partners (832)
639-7380 megan.repine@nblmidstream.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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