Rattler Midstream and Oryx Midstream announce joint acquisition of Reliance Gathering

Acquisition highlights:

• Crude oil gathering system includes over 230 miles of gathering and regional transportation pipelines and approximately 200 000 bbls of crude oil storage in Midland, Martin, Andrews, and Ector counties.
• Current system throughput of over 110 000 bpd from six substantial oil and gas operators, including Diamondback and other top-tier operators.
• Over 160 000 gross acres in Northern Midland Basin dedicated under long-term, fixed-fee agreements, some of which benefit from minimum volume commitments.
• Top three producers contributing over 85% of 2019 throughput through July have, on average, over 10 years of dedication remaining.
• Diamondback operates approximately 38% of the dedicated acreage and produced approximately 35% of the volumes on the system in 2019 through July.
• US$355 million purchase price; ownership split 60/40 between Rattler and Oryx.
• Oryx to operate the system following closing.

“This strategic acquisition demonstrates Rattler’s ability to leverage its relationship with Diamondback to invest in attractive projects underpinned by Diamondback’s operations, providing unique visibility into the growth in volumes expected on this system. Continuing its wellhead to water strategy, Diamondback, through Rattler, will now participate in transporting these crude oil barrels from the wellhead through the Reliance Gathering system and the Epic Crude Pipeline to docks and refineries around Corpus Christi. Moreover, the acreage dedicated to Reliance Gathering encompasses some of Diamondback’s highest rate of return projects and deepest levels of inventory at current activity levels, which we expect will support continued production growth for years to come,” stated Travis Stice, Chief Executive Officer of Rattler’s general partner.

Mr. Stice continued, “We are excited to partner with Oryx in the Midland Basin after having had a very productive relationship since Diamondback’s entry into the Delaware Basin in 2016. Oryx’s track record of building leading crude oil gathering and regional transportation platforms in the Permian Basin is well established, and their reputation as a reliable partner to oil and gas operators is well deserved. Accordingly, we look forward to growing this business and our relationship in the coming years.”

“We are excited about this acquisition as it marks our entry into the Midland Basin, solidifies Oryx as a pure-play, crude oil pipeline operator, and further enhances our ability to serve strong, high-quality producer customers, both new and existing,” said Brett Wiggs, Chief Executive Officer of Oryx. “Additionally, we look forward to working closely with Rattler and continuing our relationship with Diamondback, and we appreciate the confidence they have placed in us to operate this significant asset. We continue to be focused on aggressively growing our midstream footprint in the Delaware and Midland basins, providing the highest level of customer service in the business.”

Jefferies LLC is acting as exclusive financial advisor, and Sidley Austin LLP is acting as legal counsel to Reliance Gathering in connection with the transaction. Akin Gump Strauss Hauer & Feld LLP is acting as legal counsel to Rattler. Shearman & Sterling LLP is acting as legal counsel to Oryx.

Read the article online at: https://www.worldpipelines.com/business-news/04102019/rattler-midstream-and-oryx-midstream-announce-joint-acquisition-of-reliance-gathering/