EnLink Midstream to acquire subsidiaries of Tall Oak Midstream

Tall Oak Midstream LLC and its equity partner EnCap Flatrock Midstream announced that a subsidiary of EnLink Midstream Partners LP and EnLink Midstream LLC has signed definitive agreements to acquire subsidiaries of Tall Oak Midstream LLC. The sale is for approximately US$1.55 billion, subject to certain adjustments. These subsidiary entities hold substantially all of Tall Oak’s Oklahoma assets, including the STACK Natural Gas System, the STACK Crude Oil System and the CNOW Natural Gas System.

Tall Oak assets

Tall Oak’s STACK systems serve multiple oil and gas producers targeting the play’s liquids-rich, stacked pay zones in Blaine, Canadian, Kingfisher and Grady counties. The STACK Natural Gas System includes approximately 200 miles of gathering pipelines with an additional 75 miles under construction or in development, two compressor stations and the Chisholm Plant, a state-of-the-art cryogenic gas processing plant located in Kingfisher County. The plant has a capacity of 100 million ft3/d. The facility is currently being expanded by an additional 200 million ft³/d. It is expected to be completed in 3Q16. The facility connects to the Panhandle Eastern Pipeline, OneOK Gas Transmission for residue gas and the OneOK NGL Pipeline.

Tall Oak announced development of the STACK Crude Oil System in May 2015. The initial crude oil system will consist of a storage and truck-unloading facility east of Okarche, Oklahoma, in the center of the STACK play, and a 20-mile pipeline that will provide connections to multiple downstream markets.

Tall Oak’s CNOW Natural Gas System serves multiple producers targeting stacked pay zones in Creek, Logan, Lincoln, Noble, Payne and Pawnee counties. Assets include 175 miles of natural gas gathering pipeline and three compressor stations. An additional 50 miles of pipeline are under construction or in development. The CNOW System also includes the Battle Ridge Plant, a state-of-the-art cryogenic gas processing plant located in Payne County. The plant has a current capacity of 75 million ft³/d and direct access to premium downstream markets, including Southern Star Central Gas Pipeline, Enable Gas Transmission for residue gas and OneOK NGL.

A 42-mile, 16-inch high-pressure header pipeline is under construction to connect the two systems, which will provide customers with additional operational flexibility and access to premium residue markets. Tall Oak expects to bring the connector into service by the end of 2015.

Comments

“There has been a lot of interest in acquiring Tall Oak’s assets over the past several months. These are world-class assets located in the heart of some of the fastest growing and most economic plays in the United States,” said Tall Oak President and CEO Ryan Lewellyn. “We wanted to ensure that our customers would be well served, so we were very selective when it came to choosing an acquirer. EnLink is a top-tier operator that shares our values and is well positioned to provide our Mid-Continent customers with exceptional service going forward. We are excited to work closely with the EnLink team over the coming months to ensure a smooth transition of services to capture the exciting growth opportunities that surround the Tall Oak assets.”

“We are pleased to join Tall Oak in announcing this transaction,” added Dennis Jaggi, one of EnCap Flatrock’s three managing partners and a member of the Tall Oak board of directors. “Ryan, Carlos, Max and Lindel and their teams have done an outstanding job in the Mid-Continent, and we are excited that this realisation will result in very strong returns for our institutional investors. Additionally, we are pleased that we will be able to participate in the growth of these assets through ownership of ENLC securities. Tall Oak developed highly attractive assets, which are complementary with EnLink’s existing operations in Oklahoma, and we are confident that Tall Oak’s assets will experience greater growth as a part of the EnLink platform. We look forward to continuing to support the Tall Oak management team as we work together to grow Tall Oak II.”

Edited from press release by Angharad Lock

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/08122015/enlink-midstream-acquires-subsidiaries-of-tall-oak-midstream-1752/