$600 Million Cardinal Midstream Transaction Closes; Caiman Energy II Will Enter Into $1.5 Billion Joint Venture with Dominion to Develop Midstream Assets In the Utica Shale.
EnCap Flatrock Midstream
SAN ANTONIO – December 20, 2012 – EnCap Flatrock Midstream (“EnCap Flatrock”) announced today that Cardinal Midstream, LLC (“Cardinal”) has closed on the previously announced sale of substantially all of its assets to Atlas Pipeline Partners, L.P (NYSE: APL). Cardinal was founded in 2009 and is backed by private equity commitments from EnCap Flatrock Midstream and EnCap Investments L.P. The $600 million transaction includes three cryogenic processing plants located in Oklahoma’s Woodford shale, approximately 66 miles of gathering pipelines, treating and compression facilities, and a natural gas treating business.
EnCap Flatrock also announced that midstream portfolio company Caiman Energy II, LLC (“Caiman”) has entered into an agreement with Dominion (NYSE: D) to form a $1.5 billion joint venture that will provide midstream services to natural gas producers operating in the Utica shale in Ohio and Pennsylvania. Caiman Energy II and Dominion are expected to close on the formation of Blue Racer Midstream, LLC by the end of the year. Caiman will contribute up to $800 million in equity commitments from sources that include EnCap Flatrock Midstream, Williams Partners (NYSE: WPZ) and Highstar Capital. EnCap Flatrock will support Blue Racer by contributing up to $285 million to Caiman Energy II, with Williams Partners contributing up to $380 million, Highstar Capital contributing up to $95 million, and Caiman’s management group contributing up to $40 million. Dominion will contribute gathering and processing assets including Dominion East Ohio’s rich gas gathering system and the Natrium Extraction Plant currently under construction in Marshall County, West Virginia.
“It’s been an exciting year for EnCap Flatrock Midstream,” said the firm’s founder Bill Waldrip, who is one of three managing partners. “We closed on our second fund in July, reaching our $1.75 billion hard cap. We’ve also had four very successful realizations this year, totaling more than $3.5 billion in exit value. We work closely with the very best midstream management teams in the country, and we are extremely pleased with the results that effort has achieved for our investors and those teams. The midstream sector is on track for continued growth in 2013. We look forward to playing a significant role as we continue to work with our teams to pursue growth opportunities and develop midstream assets for oil and gas producers in areas like the Utica shale and other rapidly emerging resource plays across the nation.”
In addition to the sale of Cardinal Midstream’s assets, EnCap Flatrock’s realization events in 2012 include the sale of Caiman Energy’s Marcellus shale assets to Williams Partners (NYSE: WPZ) for approximately $2.5 billion and the $425 million sale of Rangeland Energy’s crude oil loading terminal in North Dakota’s Bakken shale to Ingery Midstream (NYSE: NRGM).
About EnCap Flatrock Midstream
EnCap Flatrock Midstream provides value-added private equity capital to proven management teams focusing on midstream infrastructure opportunities across North America. Founded in 2008 by EnCap Investments L.P. and Flatrock Energy Advisors, the firm is based in San Antonio and led by Managing Partners William D. Waldrip, William R. Lemmons Jr. and Dennis F. Jaggi. With more than 100 years of midstream experience, the principals at EnCap Flatrock manage a dedicated professional staff and midstream-focused investment commitments of nearly $3 billion from a broad group of prestigious institutional investors. EnCap Flatrock is currently investing out of EnCap Flatrock Midstream Fund II, a $1.75 billion fund. EnCap Flatrock’s current portfolio includes Caballo Energy, Caiman Energy II, Cardinal Midstream, EagleClaw Midstream, Lucid Energy Group, Nuevo Midstream, Rangeland Energy, and US Infrastructure. Visit www.efmidstream.com for more information.