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Salt Creek Gas gathering and processing business recapitalised

Published by , Editorial Assistant
World Pipelines,

SCM Topco, LLC, parent of Salt Creek Midstream, LLC, a full service natural gas gatherer and processor (Salt Creek Gas), has announced that it has closed on a comprehensive recapitalisation with additional investments from both its existing lender groups and funds managed by Ares Management, a leading global alternative investment manager. The recapitalisation was consensual and approved by 100% of the lender group. The financial terms of the transaction were not disclosed.

Since its inception, Salt Creek Gas has grown into one of the largest privately-owned gas gatherers and processors in the Delaware Basin. Its expansive pipeline footprint, large-scale gathering and processing facilities, and strategic downstream solutions position it to provide value-added gas gathering and processing services to Delaware Basin producers.

John Poarch, President of Salt Creek Gas, stated, “We believe this recapitalisation is an important step in securing Salt Creek Gas’ long-term success and gives it the flexibility to continue to pursue its exciting growth plans in the Delaware Basin, which has been one of the most prolific energy plays in North America. We are grateful to Salt Creek Gas’ investors and lenders for investing additional capital in the business and supporting it through this recapitalisation process.”

Poarch continued, “I am proud of the resiliency of the business and the team’s efforts to maintain excellent customer service, especially in light of current challenging industry conditions.”

Zach Lee, CEO of ARM Midstream Management, LLC (ARM Midstream) stated, “Over the past three years, Salt Creek Gas has evolved into one of the largest midstream assets in the Delaware Basin and, as a continuing equity holder, we are excited for the future of the company.”

The new capital structure is designed to provide Salt Creek Gas with increased financial flexibility, improved cash flow generation capacity, and the ability to seek to raise additional capital for growth projects and other funding needs.

Nate Walton, Co-Head of Private Equity Group at Ares Management, stated, “We are pleased to be supporting what we see as an attractive opportunity in the midstream industry. We believe this recapitalisation positions Salt Creek Gas to execute on its business plan and create meaningful value over time.”

Jefferies Group LLC acted as financial advisor for Salt Creek Gas, Kirkland & Ellis LLP as its legal advisor, and Alvarez & Marsal Holdings, LLC, as its restructuring advisor. White & Case LLP and Perella Weinberg Partners, LP acted as legal advisor and financial advisor, respectively, to the first lien lenders. Akin Gump Strauss Hauer & Feld LLP, Ducera Partners LLC, and Silver Foundry, LP acted as legal counsel and financial advisors, respectively, to the holdco facility lenders. Lazard LLC and Guggenheim Securities, LLC and Milbank LLP served as financial advisors and legal advisor, respectively, to Ares Management. Simpson Thacher & Bartlett LLP served as legal advisor to ARM Midstream.

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