Delphi Midstream Partners, an acquisition platform sponsored by American Securities, has agreed to acquire a Tarrant County, Texas-based natural gas gathering and compression system (Mansfield System) from Carrizo Oil & Gas Inc. No financial terms were disclosed except that DMP will invest up to $100 million to further develop of the system.
Delphi Midstream Partners, LLC (DMP) has agreed to acquire a natural gas gathering and compression system, the Mansfield System, located in Tarrant County, Texas from Carrizo Oil & Gas, Inc. (Carrizo). The Mansfield System has a current operating capacity of 70 mmcf per day and can be expanded to 90 mmcf per day with additional compression. The acquisition is expected to close before October 23, 2009. In addition, DMP will obtain the right to invest up to an additional $100 million to develop midstream infrastructure in northeast Pennsylvania in support of Carrizo’s Marcellus Shale development plan.
Thomas F. Karam, the CEO of DMP, stated, “Delphi Midstream Partners is delighted to acquire this important gas gathering system from Carrizo. The Mansfield System is a well-designed, high quality gathering and compression system that is critical to Carrizo’s current production in the Core Barnett Shale region. We are also pleased to commit up to $100 million of additional capital to build new midstream infrastructure and assets to support Carrizo’s Northeast Pennsylvania development in the Marcellus Shale. DMP’s combination of industry experience, state and local relationships and capital will allow us to develop much needed midstream infrastructure in Northeast Pennsylvania quickly and cost-effectively.”
DMP was founded by Thomas F. Karam and Michael J. Walsh with an equity commitment from American Securities, LLC (AS) in support of a strategy to invest in and acquire up to $2 billion of midstream energy sector companies and assets. Mr. Karam has more than 20 years of energy sector experience, most recently serving as President & COO of Southern Union Company (SUG), one of the largest natural gas pipeline companies in North America. Mr. Walsh was a partner and founding member of Highstar Capital before establishing DMP, where he was responsible for Highstar’s investments in the midstream energy sector.
DMP is interested in midstream energy businesses and assets in North America requiring a minimum equity investment of $50 million. DMP typically seeks control positions, but will also consider joint ventures or influential minority interests. The DMP business model is to create long-term value in its investment companies through operational and commercial excellence, organic and strategic growth opportunities and management-investor alignment of interests.
About Delphi Midstream Partners, LLC
Delphi Midstream Partners, LLC (DMP) is a New York-based energy investment company formed to acquire controlling or influential minority interests in midstream energy companies and assets. DMP is focused on businesses with sustainable market positions, managed commodity exposure and opportunities for organic and strategic growth. More information on DMP can be found at www.delphimidstream.com.
About American Securities
Headquartered in New York with an office in Shanghai, American Securities is a U.S. middle-market private equity firm that invests in market-leading companies in North America with annual revenues generally ranging between $100 million to $1 billion. Investments are funded from more than $6 billion of committed capital. The firm traces its roots to the family office founded in 1947 by William Rosenwald to invest and manage his share of his family’s Sears, Roebuck & Co. fortune. More information on American Securities can be found at www.american-securities.com.
Statements in this news release, including but not limited to the transactions described above and the timing, effects, benefits and consummation thereof, development of midstream infrastructure, commitment of capital and other statements that are not historical facts are forward looking statements that are based on current expectations. . Important factors that could cause actual results to differ materially from those in the forward looking statements include the failure of either party to satisfy closing conditions, or to take other actions required to consummate the transactions, satisfactory completion of DMP’s due diligence, future market and regulatory conditions, satisfaction of conditions for future capital commitments, future economic conditions, results of oil and gas operations and the level of demand for and production of natural gas