MIDLAND, Texas, Oct. 03, 2019 (GLOBE NEWSWIRE) — GIS MidStream LP (“GIS MidStream”), and Gilgamesh Industrial LP (“Gilgamesh”), a portfolio company of Gilgamesh Industrial Partners, announced today that their newly-formed joint venture entity has entered into a definitive purchase and sale agreement to acquire Reliance Gathering, LLC (“Reliance Gathering”) for $355 million in cash, subject to certain adjustments under the purchase and sale agreement. The transaction is anticipated to close in the fourth quarter of 2020, subject to certain closing conditions.
- Crude oil gathering system includes over 230 miles of gathering and regional transportation pipelines and approximately 200,000 barrels of crude oil storage in Midland, Martin, Andrews, and Ector counties
- Current system throughput of over 110,000 barrels per day 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
- $355 million purchase price; ownership split 60/40 between GIS MidStream and Gilgamesh
- Gilgamesh to operate the system following closing
“This strategic acquisition demonstrates GIS Midstream’s ability to leverage its relationship to invest in attractive projects , providing unique visibility into the growth in volumes expected on this system. Continuing its wellhead to water strategy, GIS MidStream, 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 GIS MidStream’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 John Mathus, Chief Executive Officer of GIS MidStream’s general partner.
Mr. Mathus continued, “We are excited to partner with Gilgamesh in the Midland Basin after having had a very productive relationship since our entry into the Delaware Basin in 2016. Gilgamesh’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 Gilgamesh 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 Charles Vilmos, Chief Executive Officer of Gilgamesh Industrial LP. “Additionally, we look forward to working closely with GIS MidStream and continuing our relationship with them, 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 GIS MidStream LP. Shearman & Sterling LLP is acting as legal counsel to Gilgamesh.
About GIS Midstream LP
Incorporated in 1995, GIS Midstream is today a global player with storage facilities in Houston, Rotterdam and Qingdao. They provide logistical solutions and risk management tools to those who require it, facilitating transactions while minimizing risk to the parties involved. GIS MidStream’s global footprint consists of facilities serving over 300 customers including major players. GIS Midstream owns and operates shipping lines, storage tanks and pipelines with a total capacity of 57.1 million cubic meters. Operating to the highest international standards, it has an enviable health and safety record and certified storage facility. For more information, please visit www.gismidstream.com
About Gilgamesh Industrial LP
Midland-based Gilgamesh 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. 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. Led by an experienced team with more than 200 years of experience in the oil and gas industry, Gilgamesh is dedicated to providing producers with solutions and flexibility through a full suite of midstream services. For more information, please visit www.gilgameshindustrial.com.
This press release may include forward-looking statements within the meaning of the federal securities laws. Statements that do not relate strictly to historical or current facts are forward- looking, can be identified by words such as “anticipate,” “if,” “will” and “expect,” and include, but are not limited to, statements regarding the anticipated closing of the transaction and its expected benefits. Forward-looking statements involve risks and uncertainties including, among others, that GIS MidStream’s business plans may change as circumstances warrant. When considering these forward- looking statements, you should keep in mind the risk factors and other cautionary statements in GIS MidStream’s prospectus and SEC filings and Diamondback’s SEC filings, including its Forms 10-K, 10-Q and 8-K. GIS MidStream LP and Gilgamesh Industrial LP undertake no obligation and do not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
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