Stonepeak Infrastructure Partners has agreed to acquire Oryx for about $3.6 billion. The sellers included Quantum Energy Partners, Post Oak Energy Capital, Concho Resources and WPX Energy. Barclays advised Stonepeak Infrastructure Partners on the transaction while Jefferies LLC and Citi acted as financial advisers to Oryx and its sellers. Based in Midland, Texas, Oryx is a midstream crude operator in the Permian Basin.
MIDLAND, Texas–(BUSINESS WIRE)–Affiliates of Quantum Energy Partners, Post Oak Energy Capital, Concho Resources (NYSE:CXO), WPX Energy (NYSE:WPX) and other investors announced today that they have entered into a binding agreement to sell substantially all of the assets of Oryx Southern Delaware Holdings LLC and Oryx Delaware Holdings LLC (collectively, “Oryx”) to funds managed by Stonepeak Infrastructure Partners (“Stonepeak”) for a cash purchase price of approximately $3.6 billion. For Stonepeak, Oryx represents an ideal platform for providing critical crude oil transportation services in the Permian Basin that is well-positioned to capitalize on growing production, given its differentiated service offering, expansive geographic footprint, scalable in-place infrastructure, and unique customer diversification. Oryx will retain its name and continue to be headquartered in Midland, Texas. Its leadership team, led by Brett Wiggs and Karl Pfluger, will remain in their current roles and are investing alongside Stonepeak in this transaction.
Oryx is the largest privately-held midstream crude operator in the Permian Basin. The company owns and operates a crude oil gathering and transportation system underpinned by nearly one million acres under long-term dedications from more than 20 customers, including many of the Permian’s leading oil and gas producers. The system’s 2.1 million barrels of storage and approximately 1,200 miles of in-service and under-construction pipeline span eight counties in Texas and two in New Mexico, representing a footprint across the core of the Delaware Basin that features the most economic and long-lived drilling resource in the United States. Upon completion of the remaining part of the system under construction, Oryx’s total Delaware Basin transportation capacity will ultimately exceed 900,000 barrels per day and access multiple takeaway options, providing customers the differentiated service flexibility they need to maximize the value of their production.
Brett Wiggs, CEO of Oryx, commented, “We are grateful for our productive five-year relationship with Quantum and Post Oak, whose knowledge and industry expertise were strong factors in our growth and success to-date. As we begin our next chapter and new partnership with Stonepeak, we look forward to the operational and capital support they will provide our team as we continue to aggressively grow our footprint in the Permian Basin. Most importantly, we are fortunate to have the opportunity to lead Oryx as we enter this next growth stage, maintaining strong relationships with our customers, and continuing to provide the highest level of service.”
Dheeraj Verma and Garry Tanner, Partners at Quantum Energy Partners, commented, “We would like to thank all of our partners who helped build Oryx into the premier privately-owned midstream system in the Permian basin. Partnering with exceptional entrepreneurs like the Oryx management team has been the hallmark of our success over the years. Additionally, this business is a great example of how our combined upstream and midstream expertise can translate into significant value creation for our portfolio companies and limited partners over time. We are also grateful for our cornerstone industry partners, Concho and WPX, who were a key component of Oryx’s success.”
“The development, buildout and ultimate commercialization of the Oryx crude oil gathering and transportation system in the preeminent oil basin in North America has resulted in exceptional value creation for customers and owners,” remarked Frost Cochran, Managing Director of Post Oak Energy Capital. “We have great respect for the foresight and execution capabilities of Oryx’s management team, our producer partners, capital partners and Midland based partners that led to the formation of this extraordinary infrastructure asset.”
Jack Howell, Partner and head of Stonepeak’s energy business, commented, “Stonepeak is delighted to partner with the Oryx management team to build upon the impressive franchise they have established, and our extensive experience in the Permian uniquely qualifies us to help transition Oryx into the next phase of its evolution. Oryx is the most attractive private Permian midstream asset Stonepeak has evaluated and we view it as a strategic platform and a core North American crude infrastructure asset. Our critical focus will be on continuing to provide Oryx’s diversified customer base with best in class service offerings to accommodate their growing production while also pursuing new commercial opportunities across the value-chain.”
Barclays, acting through its investment bank, advised Stonepeak Infrastructure Partners on the transaction. A Barclays-led arranger group including Goldman Sachs, RBC Capital Markets, and Jefferies LLC have provided a $1.5 billion Term Loan B in support of the transaction, which will include a refinancing of the existing Oryx Southern Delaware Holdings, LLC facility and consolidation of Oryx Southern Delaware Holdings LLC and Oryx Delaware Holdings LLC (collectively, “Oryx”) into a single Borrower.
Jefferies LLC and Citi acted as financial advisors to Oryx and its sellers.
Shearman and Sterling LLP and Vinson & Elkins LLP served as legal counsel to Oryx. Stonepeak was represented by Hunton Andrews Kurth LLP and Sidley Austin LLP with regards to the transaction, and Simpson Thatcher & Bartlett LLP, its fund counsel. Latham & Watkins, LLP represented the lender group.
About Stonepeak Infrastructure Partners
Stonepeak Infrastructure Partners (www.stonepeakpartners.com) is an infrastructure-focused private equity firm with over $15 billion of assets under management and with offices in Houston, New York, and Austin. Stonepeak invests in long-lived, hard-asset businesses and projects that provide essential services to customers, and seeks to actively partner with high-quality management teams, facilitate operational improvements, and provide capital for growth initiatives.
About Quantum Energy Partners
Founded in 1998, Quantum Energy Partners is a leading provider of private equity capital to the global energy industry, having managed together with its affiliates more than $16 billion in equity commitments since inception. Quantum invests across the energy value chain with an emphasis on North American upstream, midstream, oilfield services, energy technology and renewables sectors. For more information on Quantum, please visit www.quantumep.com.
About Post Oak Energy Capital
Post Oak, which was established in 2006, is an energy-focused private investor based in Houston, Texas. Its management team has executive management experience and a broad network in the energy business as well as significant expertise in equity investments, operations, development, finance, acquisitions and divestitures. The firm pursues private investments primarily in the upstream sector of the oil and gas industry in North America and, to a lesser extent, in oilfield service and related infrastructure. Post Oak works in close partnership with operating management teams to build businesses, accelerate growth and enhance shareholder value. www.postoakenergy.com.
About Oryx Midstream Services
Midland-based Oryx Midstream is the largest privately-held midstream crude operator in the Permian Basin. The company owns and operates a crude oil gathering and transportation system underpinned by nearly one million acres under long-term dedications from more than 20 customers. The system’s 2.1 million barrels of storage and approximately 1,200 miles of in-service and under-construction pipeline span eight counties in Texas and two in New Mexico. Led by an experienced team with more than 160 years of experience in the oil and gas industry, Oryx is dedicated to providing producers with solutions and flexibility through a full suite of midstream services. For more information, please visit www.oryxmidstream.com.