Altus Midstream has signed an agreement to combine with BCP Raptor Holdco (BCP), the parent company of EagleClaw Midstream, in a deal worth $9bn.
EagleClaw Midstream consists of EagleClaw Midstream Ventures, the Caprock Midstream and Pinnacle Midstream businesses, and a 26.7% stake in the Permian Highway Pipeline.
The transaction is expected to enable privately-owned BCP to become a public company.
Private equity firm Blackstone and infrastructure-focused investor I Squared Capital, which will gain control of Altus, are the backers of BCP.
Blackstone and I Squared Capital will hold approximately 75% stake in the combined company, while the stake owned Apache Midstream, a subsidiary of Apache, will be reduced to approximately 20%.
The remaining stake of approximately 5% of the combined company will be owned by existing Altus public shareholders.
The transaction is expected to be completed during the first quarter 2022, subject to completion of customary closing conditions, including Altus shareholder approval and regulatory reviews.
EagleClaw president and CEO Jamie Welch said: “This transaction is a transformative event for all parties and their respective stakeholders.
“The combination creates the largest pure-play midstream company in one of the world’s most prolific hydrocarbon basins, providing the scale, operational capabilities, and fully integrated service offerings necessary for long-term success.
“The pro forma enterprise is well positioned to capitalize on accelerating activity in the Delaware Basin with expanded processing and transportation capabilities for all three streams from the wellhead to end markets.”
The combined entity will be an integrated midstream company in the Texas Delaware Basin providing scale for residue gas, natural gas liquids (NGLs), crude oil and water midstream services.
It will have nearly 2 billion cubic feet (Bcf) per day natural gas processing capacity strategically located near the Waha Hub in West Texas.
The merged business is expected to expand Altus’ system footprint and breadth of services and also broadens its customer base.
Welch said: “The combined business will have a more diversified asset profile and customer base, with a lower risk profile than either entity on a stand-alone basis. Management is committed to a strong balance sheet and continuing to execute on our key ESG objectives laid out in our inaugural Sustainability Report issued in June 2021.”
