Crestwood Equity Partners (NYSE:CEQP) said Wednesday it agreed to acquire Sendero Midstream Partners for $600M in cash and First Reserve's 50% equity interest in Crestwood Permian Joint Venture for $320M in common units plus assumption of debt, which more than doubles the partnership's natural gas processing capabilities in the Delaware Basin.
The company also agreed to sell its legacy, non-core Barnett Shale gathering and processing assets to EnLink Midstream (ENLC) for $275M in cash.
Crestwood (CEQP) said Sendero Midstream's assets are highly complementary to the existing Willow Lake footprint, and can be integrated with minimal capital investment, providing substantial cost and commercial synergies.
Following the transactions, Crestwood (CEQP) expects the Delaware Basin to become its second largest asset, generating estimated 2023 adjusted EBITDA of $190M-$200M, or ~20% of the pro forma company's cash flow.
EnLink (ENLC) said the adjacency of the assets it is acquiring to the company's North Texas footprint provides significant synergies and the opportunity to redeploy assets to other areas of operation.
Pointing Crestwood's (CEQP) "fantastic" Q1 operating results and a nearly 9% yield, CashFlow Hunter offered a bullish analysis in an article published on Seeking Alpha.