Houston private equity firm Quantum Energy Partners has agreed to acquire a holding company that owns 50% of CONE Gathering LLC and 21.7 million common and subordinated limited partnership units from Noble Energy Inc., Houston, for $765 million.
The limited partnership units represent 33.5% ownership interest in CONE Midstream Partners LP, which, as of yearend 2016, operated 250 miles of pipeline with installed compression of more than 91,000 hp. The general partner of CONE Midstream is owned by CONE Gathering, whose other 50% interest is held by Pittsburgh-based Consol Energy Inc.
The deal, expected to close in the third quarter, follows the move earlier this month by another Quantum portfolio company to acquire all of Noble’s Marcellus upstream assets in northern West Virginia and southern Pennsylvania for $1.225 billion (OGJ Online, May 2, 2017). Quantum had not been identified as the buyer during that deal’s announcement.
The upstream acreage previously was part of a separate 50-50 upstream joint venture of Noble and Consol that the firms agreed to split last fall (OGJ Online, Oct. 31, 2016).
“Including this transaction, Noble Energy will realize more than $1 billion in total value from our Marcellus midstream business, which represents approximately three times our net invested capital,” said David L. Stover, Noble chairman, president, and chief executive officer. “Going forward, our midstream efforts are focused on Noble Midstream Partners, supporting our DJ basin and Delaware basin growth areas.”
Noble’s cumulative 2017 divestiture proceeds total $2 billion, primarily reflecting its Appalachia upstream and midstream sales. The firm says proceeds announced thus far this year are being used to cover cash costs from the firm’s purchase of Clayton Williams Energy Inc., for debt reduction, and to provide more financial capacity and flexibility for its US onshore oil development.
Contact Matt Zborowski at [email protected].