Crestwood Equity to boost U.S. shale footprint with $1.8 bln deal (updated)

Crestwood Equity Partners LP

26/10/2021 12:35

(Adds details on deal)
    Oct 26 (Reuters) - Oil and gas pipeline company Crestwood
Equity Partners LP  CEQP.N  agreed to buy Oasis Petroleum Inc's
 OAS.O  midstream unit  OMP.O  in a $1.8 billion deal, as it
looks to expand its footprint in U.S. shale basins. 
    The cash-and-stock deal comes as oil and gas prices have
touched multi-year highs, boosting shareholders' confidence in
the sector and encouraging mergers. 
    Last week, Altus Midstream Co announced a merge with BCP
Raptor, a holding company for pipeline assets in the Permian
Basin, with the combined entity to be valued at $9 billion,
inclusive of debt. 
    Crestwood estimates it can capture over $20 million in
incremental annual cash flow over the next several years from
the Oasis deal and identified about $25 million in annual cost
savings shortly after the transaction closes in 2022. 
    Crestwood also said on Tuesday it expects to increase its
distribution to $2.62 per unit annually, an about 5% increase
year-over-year, after the deal closes.     
    Oasis Petroleum will receive $150 million in cash and an
aggregate of 21 million units in exchange for 33.8 million units
held in its midstream company. It will also receive a $10
million cash payment for its ownership of the General Partner
interest of Oasis Midstream. 
    Shareholders of Oasis Midstream, which had an outstanding
debt of about $660 million as of Sept. 30, will receive an
aggregate of 12.9 million Crestwood units in exchange for 14.8
million shares held.
    

 (Reporting by Arathy S Nair in Bengaluru; Editing by Shinjini
Ganguli)
 ((arathys.nair@thomsonreuters.com; +1 646 223 8780 (Extn 2726);
Twitter: https://twitter.com/ArathySom;))