EagleClaw Midstream to Buy Rival Caprock for $950 Million

EagleClaw Midstream Ventures said on Wednesday it will buy rival Caprock Midstream Holdings for about $950 million, strengthening its presence in the oil-rich Permian Basin.

EagleClaw's East Toyah gas processing complex

Caprock will be renamed EagleClaw Midstream II and will operate as a sister entity to EagleClaw after the deal closes, expected in 2018.

A surge in oil and gas production in the Permian basin of west Texas and New Mexico has outstripped transport capacity and has encouraged midstream companies to invest in the region.

EagleClaw has expanded aggressively since it was acquired last year by Blackstone Energy Partners, more than doubling its processed volumes and system capacity to become largest privately held midstream operator in Permian's Delaware Basin in West Texas, the company says. EagleClaw announced last month with Kinder Morgan and Apache Corp that ExxonMobil agreed to support their proposed Permian Highway Pipeline. 

EagleClaw will buy Caprock from Energy Spectrum Capital and Caprock Midstream Management, a Dallas-based private equity firm. Blackstone described the deal as a step toward its vision of growing EagleClaw into a "major, fully-integrated midstream player, delivering comprehensive value-added services to Permian Basin producers."

EagleClaw's West Texas assets are located in Reeves, Ward, and Culberson counties and include more than 550 miles of natural gas and NGL pipelines and 720 MMcf/d of processing capacity. Caprock’s assets are located in Reeves and Ward counties and include almost 300 miles of gas, crude, NGL and water gathering pipelines, along with two natural gas processing plants, crude storage and water disposal facilities.

 (P&GJ staff & Reuters reports.  Photo: EagleClaw Midstream)

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