Noble Midstream Acuires Noble Energy’s Midstream Interests for $1.6 Billion
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Noble Midstream Partners has entered into a definitive agreement to acquire the partnership’s incentive distribution rights (IDRs) and substantially all of Noble Energy’s remaining midstream interests for $1.6 billion. The total consideration will consist of both cash and common units of limited partner interests in the partnership.
“Noble Energy has completed its midstream strategic review. We are excited to announce the resulting simplification and drop transaction. This financially-attractive acquisition of essentially all of Noble Energy’s remaining midstream assets will enhance operational synergies and increase economic alignment in Noble’s growth basins. The acquisition is expected to be accretive to distributable cash flow per unit,” said Brent J. Smolik, chief executive officer of Noble Midstream.
With a significant amount of the backbone infrastructure complete and Noble Energy’s deep drilling inventory in both the DJ and Delaware basins, these assets are expected to further drive our capital efficiency beyond our successful 2019 levels. The long-term strategic alignment with Noble Energy will enhance the growth in Noble Midstream LP unit distributions to NBL’s ownership interest.”
“The elimination of the IDRs and the acquisition simplifies our structure and enhances alignment with the sponsor, immediately lowering our cost of capital and supporting strategic long-term growth and value creation. Pro-forma for the acquisition, NBLX maintains peer-leading leverage, and with the added scale, commands a high return opportunity set to deliver top tier returns to its unitholders,” said Tom Christensen, chief financial officer.
“This transaction results in a self-funding midstream entity with increased exposure to two high return onshore basins as well as promising equity barrel value opportunities. By recalibrating our distribution, we retain a leading distribution growth rate relative to peers while better aligning the distribution with midstream investor expectations,” added Christensen.
New Assets Provide Third Party Expansion Opportunity
In addition to the DevCo interests, Noble Midstream has acquired NBL Holdings, which owns Noble Energy’s East Pony gas gathering complex in the DJ Basin and the Clayton Williams gathering system in the Delaware Basin.
The East Pony gas gathering system includes the Keota and Lilli gas processing plants and associated gas gathering pipelines. This asset marks NBLX’s first entry into DJ Basin gas processing. With the need for incremental gas processing capacity in the DJ Basin, the Keota and Lilli plants provide an additional opportunity for NBLX to grow its third-party business.
In addition, NBL Holdings owns the legacy Clayton Williams pipeline system, which includes more than 300 miles of oil, gas, and produced water gathering pipelines. These pipelines service Noble Energy’s central and southern Delaware Basin positions and will provide additional opportunities to drive capital efficiency through new well connections and secure third-party dedications.
About Noble Midstream
Noble Midstream is a growth-oriented master limited partnership formed by Noble Energy to own, operate, develop and acquire domestic midstream infrastructure assets. Noble Midstream currently provides crude oil, natural gas, and water-related midstream services in the DJ Basin in Colorado and the Delaware Basin in Texas.
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