Crestwood Equity Partners has agreed to acquire rival US-based publicly listed midstream company Oasis Midstream Partners (OMP) in a stock and cash deal worth around $1.8bn.
The transaction value includes the assumption of Oasis Midstream’s debt of around $660m as of 30 September 2021.
Oasis Midstream is a master limited partnership founded by its sponsor, Oasis Petroleum, which in turn, is an exploration and production company in the onshore Williston Basin in the US.
Crestwood Equity Partners said that the deal will enable it to add significant crude oil, produced water gathering, and natural gas gathering and processing assets in the Williston Basin.
Furthermore, it will double the inventory of tier 1 drilling locations dedicated to the company’s assets to nearly 1,200 across 535,000 dedicated acres.
Besides, the merger with Oasis Midstream is expected to further grow the company’s presence in the western and northern parts of the Williston Basin.
Crestwood Equity Partners president and CEO Robert Phillips said: “I am very excited to announce the strategic combination with Oasis Midstream, which has strong industrial logic and perfectly aligns with our stated strategy of consolidating high quality midstream assets in our core operating areas.
“This transaction enhances our competitive position in the Williston and Delaware Basins, enables Crestwood to capture substantial operational, commercial, and capacity synergies as we integrate the Oasis Midstream assets into our existing operations, and substantially expands the long-term contract acreage and inventory dedications of our gathering and processing portfolio.”
As per the terms of the agreement, Oasis Petroleum will get a cash payment of $160m and nearly 21 million shares of Crestwood Equity Partners in exchange for its 33.85 million shares of Oasis Midstream and non-economic general partner stake.
Post-merger, the former unitholders of Oasis Midstream will own nearly 35% of the enlarged Crestwood Equity Partners’ outstanding common units, of which, Oasis Petroleum will own nearly 22%.
Oasis Petroleum, which holds nearly 70% of Oasis Midstream common units, has agreed to vote in favour of the deal.
Oasis Petroleum CEO Danny Brown said: “This transaction creates a combined midstream company well positioned to drive future value with enhanced scale and customer and basin diversification.
“Crestwood is a highly regarded, diversified midstream operator with a large footprint in the Williston Basin, making it the ideal midstream partner with the expertise and team to handle a large portion of Oasis’ hydrocarbons and produced water.
“The combination of OMP and Crestwood immediately enhances value for Oasis shareholders while increasing transparency with deconsolidated financial reporting, highlighting the Company’s E&P operations.”
The deal, which is subject to customary closing conditions, is anticipated to be closed in the first quarter of 2022.
