Blue Racer Midstream Secures $800 Million Credit Facility
Company Plans Aggressive Development of Midstream infrastructure in the Utica Shale
DALLAS – Blue Racer Midstream, LLC (“Blue Racer”) announced today that it has secured a five-year, $800 million credit facility, which can be expanded to $1 billion in the future. Formed in December 2012, Blue Racer is a joint venture between Caiman Energy II, LLC (“Caiman”) and Dominion Resources (NYSE: D) (“Dominion”) dedicated to providing Utica Shale producers with midstream services and the ability to receive the highest value for their products.
Together with the private equity commitment from Caiman and the midstream assets contributed by Dominion, the credit facility supports the execution of Blue Racer’s aggressive plan to develop midstream assets in the Utica Shale over the next two to three years, including natural gas gathering, processing, fractionation and NGL transportation.
Wells Fargo Securities, LLC (“Wells Fargo”) and RBS Securities Inc. (“RBS”) acted as joint bookrunners and joint lead arrangers on the credit facility. A syndicate of 19 banks participated in the credit facility, with Comerica Bank, RBC Capital Markets, SunTrust Robinson Humphrey, Inc., and U.S. Bank National Association also acting as joint lead arrangers. The transaction closed on Friday, Aug. 16.
Jack Lafield, Blue Racer’s CEO said: “We are delighted to have completed this financing with Wells Fargo and RBS and such a prestigious group of additional lenders. The size of the credit facility is a testament to our strong relationship with the financial community, the strength of Caiman and Dominion’s track records and the tremendous response Blue Racer has received from our producer customers in the Utica Shale. The proceeds will allow us to continue to execute our growth strategy for Blue Racer’s midstream asset base while diversifying our sources of capital. Our goal is to continue to be the Utica’s premier midstream company by providing superior customer service and the region’s best opportunity to gather and process rich gas and market NGLs.”
Blue Racer Executive Vice President and Chief Financial Officer Stephen L. Arata and his finance team oversaw the arrangement of the credit facility. Vinson & Elkins provided legal counsel to Blue Racer.
News of the credit facility follows last week’s announcement that Dominion transferred ownership of the Natrium Natural Gas Processing and Fractionation Plant to Blue Racer on Aug. 9, 2013. With cryogenic processing capacity of 200 million cubic feet per day (MMcf/d) already online, Natrium is the first large-scale processing plant to serve rich-gas production in the Utica Shale. Blue Racer has already started construction of a second 200 MMcf/d cryogenic processing plant, Natrium II, which will bring the facility’s total processing capacity to 400 MMcf/d by the end of the first quarter of 2014.
About Blue Racer Midstream, LLC
Formed In December 2012, Blue Racer Midstream is a $1.5 billion joint venture between Caiman Energy II, LLC and Dominion (NYSE: D) dedicated to providing Utica Shale producers with midstream services and the ability to receive the highest value for their products. With midstream assets strategically located in the heart of the Utica Shale and a robust expansion plan in place, Blue Racer's services include gathering, processing, fractionation, and natural gas liquids transportation and marketing.
Dominion contributed existing midstream assets to Blue Racer, including 500 miles of Dominion East Ohio gathering lines that span the Utica Shale, and the Natrium Natural Gas Processing and Fractionation Plant in Marshall County, West Virginia. Additional contributions of physical assets are expected in 2013 and 2014. Caiman’s contribution includes up to $800 million in equity capital commitments and the experience and expertise required to manage and expand Blue Racer’s asset base. For more information visit www.BlueRacerMidstream.com.