SOURCE: Coronado Midstream, LLC

Coronado Midstream, LLC

February 02, 2015 21:53 ET

Coronado Midstream Announces Sale to Enlink Midstream Partners

MIDLAND, TX--(Marketwired - February 02, 2015) - Coronado Midstream LLC ("Coronado") today announced it has signed a definitive agreement to sell to EnLink Midstream Partners, LP (EnLink) its natural gas gathering and processing facilities in the Permian Basin, for approximately $600 million, subject to certain adjustments. 

The Board of Managers determined that aligning with a partner with similar growth objectives and complementary assets would offer the best combination of value, operating efficiencies and customer service while allowing the existing and planned assets to prosper in the years to come.

The transaction begins a new exciting chapter for the company and its staff as the assets of Coronado will serve as a cornerstone for EnLink's expanded growth footprint in the Permian Basin. The combination will offer even more broadening of the customer base and will now be a new leg of growth for a well-capitalized midstream organization.

"We want our customers to know that despite the change in name, our unrelenting focus on customer service and strategic alignment with your development plans will continue and will be stronger than ever," said Andy Deck, Coronado Chief Executive Officer. 

EnLink has developed a similar enviable growth profile which is expected to be integrated into a very strong regional business unit covering the Northern Midland Basin. Separate from Coronado, EnLink's assets in the basin include approximately 150 miles of natural gas gathering and lean gas fuel pipelines and two cryogenic processing facilities with approximately 120 MMcf/d of capacity in Martin, Howard, Glasscock and Reagan counties. EnLink also recently announced the acquisition of LPC Crude Oil Marketing, a crude oil logistics business in the Permian basin with 13 pipeline and refinery injection stations throughout the Midland Basin, 67 miles of gathering pipelines in Upton County and trucking operations that serve the basin.

"This transaction builds on EnLink's growing midstream platform in West Texas, and we look forward to serving Coronado's customers with excellent service," said Barry E. Davis, EnLink President and Chief Executive Officer. "By combining Coronado with our recent LPC acquisition and our existing footprint, we have the opportunity to create tremendous value for our producer customers by linking our gas gathering, processing and crude oil logistics operations to provide a full-service midstream solution."

The owners of Coronado will receive $240 million in cash, $180 million of Partnership common units and $180 million of a new class of Partnership common units, subject to certain adjustments. The Partnership will be able to pay distributions on the new class of Partnership common units in cash or in additional common units of such new class, at the Partnership's election. The new class of Partnership common units will be entitled to receive distributions equal to those paid on the Partnership common units currently outstanding. After five quarters of distributions have been paid following the closing of the transaction, or earlier at the Partnership's election, the new class of common units will convert into the same class of common units that are currently outstanding.

The transaction is expected to close in the first quarter and is subject to antitrust clearance and other customary closing conditions. Coronado Midstream LLC was advised by Barclays, Ltd and Sidley Austin LLP and is owned by Reliance Energy, Wexford Capital LP, Gulfport Energy Corp, Wallace Family Partnership LP and Ted Collins, Jr.

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