Brazos Midstream sells Delaware basin units for $1.75 billion

April 9, 2018
Brazos Midstream Holdings and its financial sponsor Old Ironsides Energy have entered into a definitive agreement to sell its Delaware basin subsidiary companies to North Haven Infrastructure Partners II, an investment fund managed by Morgan Stanley Infrastructure and related funds for $1.75 billion in cash. 

Brazos Midstream Holdings LLC, Fort Worth, and its financial sponsor, Old Ironsides Energy, have entered into a definitive agreement to sell its Delaware basin subsidiary companies to North Haven Infrastructure Partners II (NHIP II), an investment fund managed by Morgan Stanley Infrastructure (MSI) and related funds for $1.75 billion in cash.

The transaction includes committed debt financing of $950 million ($900 million of term loan and $50 million of revolving credit facility).

Brazos is a large private natural gas and crude oil midstream company with assets in Reeves, Ward, and Pecos counties. Assets in include 350 miles of natural gas and crude oil gathering pipelines, a natural gas processing complex with 260 MMcfd of processing capacity in operation with an additional 200 MMcfd of capacity under construction, and 50,000 bbl of crude oil storage (OGJ Online, Jan. 23, 2018).

As part Brazos’ late-2017 acquisition of a natural gas gathering system in the southern Delaware basin from Callon Petroleum Co., the operator signed a long-term, fee-based agreement with Callon for gas gathering and processing services for acreage under development in the southern Delaware’s Ward and Pecos counties in Texas. Including the Callon dedication, Brazos’ midstream infrastructure is anchored by long-term acreage dedications with Permian operators covering 300,000 acres (OGJ Online, Oct. 10, 2017).

Closing is expected in this year’s second quarter and is subject to customary approvals and closing conditions. After closing, Brazos will retain its name and operate as a portfolio company of NHIP II. The members of the Brazos management team will remain in their current roles.