Per the terms of the agreements, QLCP will fund a $100 MM distribution to Devon, and will also fund the majority of incremental Partnership capital to build out the Cotton Draw midstream assets over the next several years
QL Capital Partners enters into partnership with Devon Energy to fund Delaware Basin gas gathering infrastructure. Photo: courtesy of Robert-Owen-Wahl from Pixabay.
QL Capital Partners, LP (“QLCP”) and Devon Energy Corporation (NYSE:DVN) (“Devon”, “DVN” or “the Company”) have entered into an agreement to create a new partnership to fund selected gas gathering and compression assets owned by Devon in the Company’s highly productive “Cotton Draw” development area within the Delaware Basin.
As part of the transaction, Devon will contribute its existing gas gathering and compression infrastructure within an area of mutual interest to Cotton Draw Midstream, LLC (“the Partnership”), a newly formed partnership which Devon will continue to operate pursuant to a management services agreement. Devon will dedicate to the Partnership approximately 24,000 gross upstream acres for gathering and compression on the Partnership’s system. Per the terms of the agreements, QLCP will fund a $100 MM distribution to Devon, and will also fund the majority of incremental Partnership capital to build out the Cotton Draw midstream assets over the next several years.
Ajay Khurana, Managing Partner of QLCP, stated, “QL Capital Partners was formed to provide constructive capital solutions to some of the best energy companies in North America. Our partnership with Devon is a great reflection of our strategy. Devon has a long and successful track record of developing high quality upstream and midstream assets in the Permian. We are excited to provide the expansion capital for Cotton Draw Midstream as Devon continues to develop this world class asset.”
Kirkland & Ellis served as legal counsel to QLCP and Vinson & Elkins served as legal counsel to Devon.
Source: Company Press Release