Stonepeak Infrastructure Partners’ $3.6 Billion Acquisition of Oryx Midstream

Barclays, acting through its investment bank, advised Stonepeak Infrastructure Partners on the transaction. A Barclays-led arranger group including Goldman Sachs, RBC Capital Markets, and Jefferies LLC have provided a $1.5 billion Term Loan B in support of the transaction, which will include a refinancing of the existing Oryx Southern Delaware Holdings, LLC facility and consolidation of Oryx Southern Delaware Holdings LLC and Oryx Delaware Holdings LLC (collectively, “Oryx”) into a single Borrower. Jefferies LLC and Citi acted as financial advisors to Oryx and its sellers. Shearman and Sterling LLP and Vinson & Elkins LLP served as legal counsel to Oryx. Stonepeak was represented by Hunton Andrews Kurth LLP and Sidley Austin LLP with regards to the transaction, and Simpson Thatcher & Bartlett LLP, its fund counsel. Latham & Watkins, LLP represented the lender group.

Affiliates of Quantum Energy Partners, Post Oak Energy Capital, Concho Resources (NYSE:CXO), WPX Energy (NYSE:WPX) and other investors announced today that they have entered into a binding agreement to sell substantially all of the assets of Oryx Southern Delaware Holdings LLC and Oryx Delaware Holdings LLC (collectively, “Oryx”) to funds managed by Stonepeak Infrastructure Partners (“Stonepeak”) for a cash purchase price of approximately $3.6 billion. For Stonepeak, Oryx represents an ideal platform for providing critical crude oil transportation services in the Permian Basin that is well-positioned to capitalize on growing production, given its differentiated service offering, expansive geographic footprint, scalable in-place infrastructure, and unique customer diversification. Oryx will retain its name and continue to be headquartered in Midland, Texas. Its leadership team, led by Brett Wiggs and Karl Pfluger, will remain in their current roles and are investing alongside Stonepeak in this transaction.

Oryx is the largest privately-held midstream crude operator in the Permian Basin. The company owns and operates a crude oil gathering and transportation system underpinned by nearly one million acres under long-term dedications from more than 20 customers, including many of the Permian’s leading oil and gas producers. The system’s 2.1 million barrels of storage and approximately 1,200 miles of in-service and under-construction pipeline span eight counties in Texas and two in New Mexico, representing a footprint across the core of the Delaware Basin that features the most economic and long-lived drilling resource in the United States. Upon completion of the remaining part of the system under construction, Oryx’s total Delaware Basin transportation capacity will ultimately exceed 900,000 barrels per day and access multiple takeaway options, providing customers the differentiated service flexibility they need to maximize the value of their production.

Hunton Andrews Kurth advised Stonepeak Infrastructure Partners with a team led by led by partners Mike O’Leary (Picture), Courtney Cochran Butler and Taylor Landry, with assistance from associates Erin Juvenal and Marshall Heins. Partner Harve Truskett and associates Ming Lei, Alex Miron and Rachel Morico are providing assistance on the gathering, transportation and dedication agreements; partners Tom Ford and Allison Mantor are providing tax advice; partner Lisa Shelton is providing environmental advice, partner Tony Eppert and associate Emily Cabrera are providing advice on compensation and benefits matters; partners Tammy Brennig and Rob Taylor and associate Jared Grodin are providing assistance in connection with the debt financing and debt commitments; partner Rich Warren is providing advice in connection with representations and warranty insurance; partner Shemin Proctor is providing regulatory advice; and partner O’Banion Williams and associate Chris Richardson are providing real property advice; partner Joe Buoni is providing litigation diligence advice; and partner Larry Bracken and associates Andrea DeField and David Costello are providing insurance coverage diligence advice.

Shearman & Sterling represented Oryx Southern Delaware Holdings LLC and Oryx Delaware Holdings LLC with a team including Sarah McLean, Todd Lowther, Derek Kershaw, Nathan Wood, S. Lynn Diamond, Monica Raspino, Douglas Goldstein, Alix Charles, Kelli Sims, Devon Yamauchi and Adam Sternberg.

Vinson & Elkins advised affiliates of Quantum Energy Partners and Post Oak Energy Capital in the agreement to sell substantially all of the assets of Oryx Southern Delaware Holdings LLC and Oryx Delaware Holdings LLC with a team led by Robert Hughes and partner Keith Fullenweider, with assistance from associate Sara Bloom. Also advising were partner John Lynch; partner Sean Becker; partner Stephen Jacobson and associate Mary Daniel Morgan; partner David Wicklund and associate Caitlin Snelson; partners Bryan Loocke and Danielle Patterson and associate Jeremy Tripp; and senior associate Matt Dobbins.

Involved fees earner: Lawrence Bracken II – Hunton Andrew Kurth; Tammy Brennig – Hunton Andrew Kurth; Joseph Buoni – Hunton Andrew Kurth; Emily Cabrera – Hunton Andrew Kurth; Courtney Cochran Butler – Hunton Andrew Kurth; David Costello – Hunton Andrew Kurth; Andrea DeField – Hunton Andrew Kurth; Anthony Eppert – Hunton Andrew Kurth; Thomas Ford Jr. – Hunton Andrew Kurth; Jared Grodin – Hunton Andrew Kurth; Marshall Heins II – Hunton Andrew Kurth; Erin Juvenal – Hunton Andrew Kurth; Taylor Landry – Hunton Andrew Kurth; Ming Lei – Hunton Andrew Kurth; Allison Mantor – Hunton Andrew Kurth; Alex Miron – Hunton Andrew Kurth; Lisa Montgomery Shelton – Hunton Andrew Kurth; Rachel Morico – Hunton Andrew Kurth; Michael O’Leary – Hunton Andrew Kurth; Shemin Proctor – Hunton Andrew Kurth; Christopher Richardson – Hunton Andrew Kurth; Roberts Taylor Jr. – Hunton Andrew Kurth; Harve Truskett – Hunton Andrew Kurth; Richard Warren – Hunton Andrew Kurth; O’Banion Williams III – Hunton Andrew Kurth; Alix Charles – Shearman & Sterling; Lynn Diamond – Shearman & Sterling; Douglas Goldstein – Shearman & Sterling; Derek Kershaw – Shearman & Sterling; Todd Lowther – Shearman & Sterling; Sarah McLean – Shearman & Sterling; Monica Raspino – Shearman & Sterling; Kelli Sims – Shearman & Sterling; Adam Sternberg – Shearman & Sterling; Nathan Wood – Shearman & Sterling; Devon Yamauchi – Shearman & Sterling; Sean Becker – Vinson & Elkins LLP; Sara Bloom – Vinson & Elkins LLP; Matthew Dobbins – Vinson & Elkins LLP; Keith Fullenweider – Vinson & Elkins LLP; Robert Hughes – Vinson & Elkins LLP; Stephen Jacobson – Vinson & Elkins LLP; Bryan Loocke – Vinson & Elkins LLP; John Lynch – Vinson & Elkins LLP; Danielle Mangrum Patterson – Vinson & Elkins LLP; Mary Daniel Morgan – Vinson & Elkins LLP; Caitlin Snelson – Vinson & Elkins LLP; Jeremy Tripp – Vinson & Elkins LLP; David Wicklund – Vinson & Elkins LLP;

Law Firms: Hunton Andrew Kurth; Shearman & Sterling; Vinson & Elkins LLP;

Clients: Oryx Delaware Holdings LLC; Oryx Southern Delaware Holdings LLC ; Post Oak Energy Capital; Quantum Energy Partners; Stonepeak Infrastructure Partners;

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Author: Ambrogio Visconti