Published: October 4, 2022 |

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Targa Resources and Lucid Energy Group have entered into a definitive agreement under which a wholly-owned subsidiary of Targa will acquire Lucid Energy Delaware from Riverstone Holdings and Goldman Sachs Asset Management for $3.55 billion in cash.

Lucid provides natural gas gathering, treating, and processing services in the Delaware Basin, including approximately 1,050 miles of natural gas pipelines and approximately 1.4 billion cubic feet per day (Bcf/d) of cryogenic natural gas processing capacity in service or under construction located primarily in Eddy and Lea counties of New Mexico.

Lucid’s Delaware Basin footprint overlays some of the most economic crude oil and natural gas producing acreage in North America. Current rig activity supports over 20 years of drilling inventory on Lucid’s greater than 600,000 dedicated acres, which are further supplemented by significant volumes subject to minimum volume commitments. Lucid’s assets are anchored by long-term, fixed-fee contracts and acreage dedications from a diverse set of high-quality customers. Approximately 70 percent of current system volumes are sourced from investment grade producers.

“The strength of Targa’s standalone financial position has afforded us the flexibility to consider attractive opportunities to grow our business through acquisitions, as evidenced by our ability to finance the purchase of Lucid,” said Matt Meloy, chief executive officer of Targa.

“Lucid’s management team has developed an attractive position in the Delaware Basin and we look forward to continuing to provide value added services to the producer customers. This is an exciting acquisition that aligns with our integrated strategy as we are expanding and diversifying our Permian Basin footprint with Lucid’s complementary presence at an attractive investment multiple that we expect will further enhance the creation of shareholder value and continue to drive more volumes through Targa’s downstream businesses,” added Meloy.

“Over the past several years, Lucid has firmly established itself as a leading midstream processor in the Delaware Basin, with a talented team, sophisticated operations and infrastructure, and strong customer partnerships,” said Mike Latchem, CEO of Lucid Energy.

“I am immensely proud of what we have achieved, as today’s transaction is a testament to the commitment and expertise of our team members and our strategy of growing the business for the benefit of all stakeholders. On behalf of Lucid, I want to express our gratitude to our sponsors, Riverstone and Goldman Sachs, whose partnership was instrumental in building the platform and helping to position the company for its next chapter of success,” added Latchem.

“The transaction with Targa will position Lucid for its next stage of growth, while creating enhanced opportunities for its employees, customers, and communities. Riverstone is pleased to have executed its strategy of partnering with Goldman Sachs and Lucid’s exceptional management team, where the combination of our capital and industry expertise resulted in strong returns for all stakeholders,” said Baran Tekkora, a partner at Riverstone and co-head of Private Equity.

“We are pleased to have partnered with Lucid and Riverstone over the last several years, as the company has continued its growth as a leading gas gathering and processing platform in the Delaware Basin,” said Scott Lebovitz, partner and co-head of the Infrastructure investing business within Goldman Sachs Asset Management.

“We believe Mike and the team have done a great job of expanding customer relationships with high quality producers in the basin while continuing their commitment to the environment, safety, and the communities they serve,” added Lebovitz.

About Targa Resources Corp.
Targa Resources Corp. is a leading provider of midstream services and is one of the largest independent midstream infrastructure companies in North America. The company owns, operates, acquires and develops a diversified portfolio of complementary domestic midstream infrastructure assets and its operations are critical to the efficient, safe and reliable delivery of energy across the United States and increasingly to the world. The company’s assets connect natural gas and NGLs to domestic and international markets with growing demand for cleaner fuels and feedstocks. The company is primarily engaged in the business of: gathering, compressing, treating, processing, transporting, and purchasing and selling natural gas; transporting, storing, fractionating, treating, and purchasing and selling NGLs and NGL products, including services to LPG exporters; and gathering, storing, terminaling, and purchasing and selling crude oil.

To stop by Targa’s website, CLICK HERE

About Lucid Energy Group
Lucid Energy Group is the largest privately held natural gas processor in the Permian Basin, providing the full range of gas midstream services to more than 50 customers in New Mexico and West Texas. Lucid is supported by growth capital commitments from a joint venture formed by Riverstone Global Energy and Power Fund VI, L.P., an investment fund managed by Riverstone Holdings and investment funds managed by Goldman Sachs Asset Management.

To stop by Lucid Energy’s website, CLICK HERE

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