Stonepeak Infrastructure Partners has agreed to acquire Oryx Midstream Services, a midstream crude operator in the Permian Basin, for about $3.6bn, from a group of investors.


Image: Oryx Midstream to be acquired by Stonepeak. Photo: courtesy of rawpixel/Pixabay.

In this connection, funds managed by Stonepeak will buy substantially all of the assets of Oryx Southern Delaware and Oryx Delaware that make up Oryx Midstream, from affiliates of Quantum Energy Partners, Post Oak Energy Capital, Concho Resources, WPX Energy and other investors.

Based in Texas, Oryx Midstream is the owner and operator of a crude oil gathering and transportation system, which under long-term dedications, is underpinned by around one million acres from more than 20 oil and gas producers.

The midstream crude system of the company has 2.1 million barrels of storage and about 1,931km of in-service and under-construction pipeline that traverse eight counties in Texas and two counties in New Mexico.

Oryx Midstream is set to expand its current Delaware Basin transportation capacity of 650,000 barrels per day to more than 900,000 barrels per day by early 2020 after completing construction on the remaining portion of its midstream crude system.

Stonepeak believes that the transaction will give it an ideal platform to offer critical crude oil transportation services in the Permian Basin. The private equity firm further said that the midstream company is well-placed to leverage on growing production considering its differentiated service offering, scalable existing infrastructure, and expansive geographic presence and customer diversification.

Stonepeak partner and energy business head Jack Howell said: “Oryx is the most attractive private Permian midstream asset Stonepeak has evaluated and we view it as a strategic platform and a core North American crude infrastructure asset.

“Our critical focus will be on continuing to provide Oryx’s diversified customer base with best in class service offerings to accommodate their growing production while also pursuing new commercial opportunities across the value-chain.”

Post-acquisition, Oryx Midstream will continue to operate under the same name and remain to be based in Midland, Texas.

Oryx Midstream CEO Brett Wiggs said: “As we begin our next chapter and new partnership with Stonepeak, we look forward to the operational and capital support they will provide our team as we continue to aggressively grow our footprint in the Permian Basin.”