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Lotus Midstream and EnCap Flatrock Midstream Agree to Sell Lotus Midstream to Energy Transfer for $1.45 Billion
Rhea-AI Impact
(Low)
Rhea-AI Sentiment
(Very Positive)
Tags
Rhea-AI Summary
Lotus Midstream has signed a definitive agreement to sell itself to Energy Transfer LP (NYSE: ET) for approximately $1.45 billion. The transaction is expected to close in Q2 2023, pending regulatory approval. Lotus Midstream, based in Sugar Land, Texas, operates a significant crude oil gathering and transportation system from the Permian Basin to Cushing and Gulf Coast markets. The company, backed by EnCap Flatrock Midstream, has transformed its business model since its partnership began in 2018, focusing on integrated transportation networks. This acquisition is a noteworthy move for Energy Transfer in enhancing its midstream assets.
Positive
Acquisition price of $1.45 billion indicates strong market valuation.
Lotus Midstream enhances Energy Transfer's midstream infrastructure.
Lotus Midstream's established transportation system provides access to key markets.
Negative
None.
SAN ANTONIO & SUGAR LAND, Texas--(BUSINESS WIRE)--
Lotus Midstream (“the Company”) and its financial sponsor EnCap Flatrock Midstream (“EnCap Flatrock”) today announced they have signed a definitive agreement to sell Lotus Midstream to Energy Transfer LP (NYSE: ET) for approximately $1.45 billion. The transaction is expected to close in the second quarter of 2023, subject to regulatory approval and customary closing conditions.
Located in Sugar Land, Texas, Lotus Midstream is a premier crude oil gathering and transportation system connecting the Permian Basin to Cushing and Gulf Coast markets. The Company originally partnered with EnCap Flatrock in 2018 and is led by three founding partners, Chief Executive Officer Mike Prince, Chief Commercial Officer Emily Baker and Chief Operating Officer Jen Fontenot.
In September 2018, Lotus completed the acquisitions of the Centurion Pipeline and Southeast New Mexico (“SENM”) crude gathering systems. Management commercially transformed the business from a producer-centric system to an integrated transportation network providing wellhead connectivity to major downstream markets including Cushing, Nederland, Houston, and Corpus Christi. Lotus subsequently announced its participation in the Wink-to-Webster Pipeline which transports production to the Gulf Coast refining market via the largest crude takeaway pipeline out of the Permian Basin.
From Lotus Midstream
“We are thankful for the opportunity provided by EnCap Flatrock to have grown and developed Centurion Pipeline,” said Lotus Midstream CEO Mike Prince. “We have had the good fortune to work alongside outstanding and dedicated people, who are responsible for Centurion’s collective success.”
From EnCap Flatrock Midstream
“We are pleased to have reached agreement with Energy Transfer for the sale of Lotus Midstream,” said EnCap Flatrock Managing Partner Greg King. “Mike, Emily, Jen and the Lotus team built a fantastic business. We are grateful for their partnership and are thankful to our investors for their support of this significant investment for EnCap Flatrock.”
Advisers
Jefferies served as financial advisor and Vinson & Elkins as legal advisor to Lotus Midstream, and Sherman & Sterling as EnCap Flatrock’s legal advisor.
About Lotus Midstream
Based in Sugar Land, Texas, Lotus Midstream is an independent energy company focused on the development of midstream infrastructure and services necessary to transport crude oil and condensate from the wellhead to market. Lotus owns the Centurion Pipeline System, a large-scale, integrated network of approximately 3,000 miles of crude oil gathering and transportation pipelines that extends from southeast New Mexico across the Permian Basin of West Texas to Cushing, Oklahoma. Lotus Midstream is backed by EnCap Flatrock Midstream. For more information, please visit lotusmidstream.com.
About EnCap Flatrock Midstream
EnCap Flatrock Midstream provides value-added growth capital to proven management teams focused on midstream infrastructure opportunities across North America. The firm was formed in 2008 by a partnership between EnCap Investments L.P. and Flatrock Energy Advisors, LLC. Based in San Antonio with offices in Oklahoma City and Houston, the firm manages investment commitments of over $9 billion from a broad group of prestigious institutional investors. For more information, please visit efmidstream.com.
