Capital Raise: Noble Midstream gets $200m from GIP to pay Ares-backed EPIC

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[Context: On March 25, Global Infrastructure Partners announced a $200m equity commitment to Noble Midstream Partners (NYSE: NBLX) to fund its capital contributions related to its 30% equity interest in the Ares Management-backed EPIC Pipeline. Further details, advisors and related links are below.]


Noble Midstream | GIP | EPIC Pipeline | Ares

Noble Midstream Secures Preferred Investment from Global Infrastructure Partners Capital Solutions Fund for EPIC Crude Pipeline

HOUSTON–March 25, 2019–(BUSINESS WIRE)–Noble Midstream Partners LP (NYSE: NBLX) (the “Partnership” or “Noble Midstream”) today announced it has secured a $200 million equity commitment (“Preferred Equity”) from Global Infrastructure Partners Capital Solutions Fund (“GIP”) to fund capital contributions to Dos Rios Crude Intermediate LLC, a newly-formed subsidiary holding Noble Midstream’s 30% equity interest in the EPIC Crude Pipeline. Of the $200 million total commitment, $100 million will be funded during the first quarter of 2019, with the remaining $100 million available for a one-year period, subject to certain conditions precedent. The Preferred Equity is perpetual and has a 6.5% annual dividend rate, payable quarterly in cash, with the ability to defer payment during the first two years following the closing. In addition, Noble Midstream can redeem the Preferred Equity in whole or in part at any time for cash at a predetermined redemption price. GIP can request redemption of the Preferred Equity following the later of the sixth anniversary of the Preferred Equity closing or the fifth anniversary of the EPIC Crude Pipeline completion date at a pre-determined base return. Proceeds from the Preferred Equity will be used to repay a portion of outstanding borrowings under the Partnership’s revolving credit facility, which were drawn to fund the Partnership’s exercise of its option to invest in the EPIC Crude Pipeline.

Commenting on the announcement, John Bookout, Chief Financial Officer, said, “We look forward to having GIP as our partner given their extensive energy investing track record and believe this transaction is a further endorsement of our investment in the EPIC Crude Pipeline. This Preferred Equity provides an attractive funding source for the Partnership, allowing us to maintain a prudent balance sheet without issuing common equity as the EPIC Crude Pipeline progresses. We are excited to capitalize on the growing demand for crude oil takeaway and export capability from the Permian Basin and look forward to adding a high-quality source of cash flow to our portfolio. The EPIC Crude Pipeline, together with our other recently announced joint ventures, is a crucial piece in building a leading Permian Basin midstream platform and delivering long-term value for our unitholders.”

The 30-inch EPIC Crude Pipeline is being designed with an initial capacity of 590 MBbl/d from the Permian Basin and Eagle Ford to the Gulf Coast. With the installation of additional pumps and storage, EPIC can increase the 30-inch capacity to approximately 900 MBbl/d. Interim service remains on track for startup in the third quarter of 2019 and permanent service is anticipated in January of 2020.

Barclays Capital Inc. acted as financial advisor and Vinson & Elkins L.L.P. served as legal counsel to Noble Midstream. Bracewell LLP represented GIP.

About Noble Midstream

Noble Midstream is a growth-oriented master limited partnership formed by Noble Energy, Inc., to own, operate, develop and acquire domestic midstream infrastructure assets. Noble Midstream currently provides crude oil, natural gas, and water-related midstream services in the DJ Basin in Colorado and the Delaware Basin in Texas.

About Global Infrastructure Partners

Global Infrastructure Partners (“GIP”) is an independent infrastructure fund manager that invests in the equity and credit of infrastructure assets and businesses. GIP targets investments in OECD and select emerging market countries in single assets and portfolios of assets and companies in power and utilities, natural resources infrastructure, air transport infrastructure, seaports, freight railroad, water distribution and treatment and waste management. GIP has offices in New York, London and Mumbai, with an affiliate in Sydney and portfolio company operations headquarters in Stamford, Connecticut.

About EPIC Pipeline

EPIC was formed in 2017 to build, own, and operate midstream infrastructure in both the Permian and Eagle Ford Basins. EPIC’s first two projects, the EPIC Crude Pipeline and the EPIC NGL Pipeline, will transport crude and NGL across Texas for delivery into the Corpus Christi market. The EPIC Pipelines are backed by capital commitments from funds managed by the Private Equity Group of Ares Management, L.P. (NYSE: ARES).
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