Lucid Energy Group, Dallas, agreed to sell Lucid Energy Group II LLC (Lucid II) to a joint venture controlled by Riverstone Global Energy & Power Fund VI LP, an investment fund managed by Riverstone Holdings LLC, and investment funds managed by the Merchant Banking Division of Goldman Sachs Group Inc. for $1.6 billion in cash. The transaction includes committed debt financing provided by Jefferies LLC.
The Lucid II assets, which lie in the northern Delaware basin, include the South Carlsbad and Artesia natural gas gathering and processing systems.
The deal includes 1,700 miles of gas gathering pipelines and 585 MMcfd of processing capacity. An additional 200 MMcfd is under construction and scheduled to be in service by midyear.
Lucid II holds long-term dedications and production volume commitments from oil and gas producers operating in the 450,000 acres spanning New Mexico’s Eddy and Lea counties.
Privately held Lucid Energy Group holds more than 1 bcf of gas processing capacity in operation or under construction in the Permian basin and more than 2,400 miles of pipelines. EnCap Flatrock Midstream serves as its financial sponsor.
Lucid II will retain its name and operate as a Riverstone and Goldman Sachs MBD portfolio company. The members of the Lucid management team will remain in their current roles with Lucid II.
Closing is expected in this year’s first quarter.