Exit: Denham and Ridgemont sells Whitewater to First Infrastructure

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[Context: On February 4, Denham Capital and Ridgemont Equity announced an agreement to sell Whitewater Midstream to First Infrastructure Capital Advisors. Further details, advisors and related links are below.]


WhiteWater Midstream  | Denham Capital  | Ridgemont Equity

First Infrastructure Capital Acquires Premier Delaware Basin Pipeline Through Acquisition of WhiteWater Midstream; The Transaction Positions WhiteWater for the Long Term and Provides Substantial Capital for Future Projects

AUSTIN, Texas & HOUSTON–February 04, 2019–(BUSINESS WIRE)–WhiteWater Midstream (“WhiteWater”) and its financial sponsors, Denham Capital Management (“Denham”) and Ridgemont Equity Partners (“Ridgemont”), announced today that they have entered into definitive agreements for the sale of WhiteWater to funds managed by First Infrastructure Capital Advisors, LLC (“First Infrastructure Capital”).

As part of the transaction, First Infrastructure Capital will acquire WhiteWater, including its 60% stake in Agua Blanca, a Delaware Basin intrastate natural gas pipeline system. Contemporaneous with this transaction, First Infrastructure Capital also entered into definitive agreements to acquire WPX Energy, Inc.’s 20% ownership stake in Agua Blanca. WhiteWater management will remain with the asset and is committed to growing Agua Blanca to service its customer base. Closing is expected in the first quarter of 2019 and is subject to customary approvals and closing conditions.

Agua Blanca is a natural gas residue pipeline servicing the Delaware Basin. The system consists of ~90 miles of 36″ diameter pipeline and 70 miles of smaller diameter pipeline crossing portions of Culberson, Loving, Pecos, Reeves, Ward and Winkler counties. The initial capacity is ~1.4 Bcf/d with significant expansion plans underway. The asset is supported by multiple, substantial, long-term, take or pay contracts. The Agua Blanca system has a multitude of direct downstream connections which provide shippers on the system access to multiple markets.

Christer Rundlof, CEO of WhiteWater said, “We are very excited about our new partnership with First Infrastructure Capital, who provides us with access to strong construction and operations expertise and access to significant capital to continue to expand the Agua Blanca system and execute other projects under development. WhiteWater is committed to continuing to partner with shippers in the Delaware Basin. Our new sponsor has a long investment horizon that will allow us to continue to manage the asset for the long term.”

Christer continued, “We are grateful to have had Denham and Ridgemont as trusted partners. We appreciate their confidence in backing WhiteWater as a first-time team. Denham and Ridgemont’s energy sector expertise has been an important part of our team’s success. We are also extremely grateful to our joint venture partners and other anchor shippers who allowed us to grow the Agua Blanca system so quickly. MarkWest, Targa and WPX have been outstanding partners throughout the development of Agua Blanca. We look forward to the opportunity to work together on future projects.”

Dan Shapiro, Managing Partner of First Infrastructure Capital Advisors, LLC said, “WhiteWater has created a unique cornerstone infrastructure asset that maximizes natural gas take-away options for producers in the Delaware Basin. We look forward to working closely with the team to invest significant capital in expansions of the Agua Blanca system, other natural gas residue, natural gas liquids, and complementary energy infrastructure projects.”

Jordan Marye, Managing Partner of Denham said, “We congratulate the entire WhiteWater team on their success in building a progressive midstream business focused on delivering value to shippers in the Delaware Basin and beyond. We are excited to continue to partner with WhiteWater, First Infrastructure Capital and Ridgemont on future projects under development.”

Tudor, Pickering, Holt & Co. and Credit Suisse Securities (USA) LLC acted as financial advisors to WhiteWater, Denham, and Ridgemont in connection with the transaction. Simmons Energy, A Division of Piper Jaffray, acted as the exclusive financial advisor to First Infrastructure Capital. Sidley Austin LLP acted as lead counsel for WhiteWater and Denham. Troutman Sanders LLP acted as lead counsel for Ridgemont. Latham & Watkins LLP acted as lead counsel for WhiteWater management. Milbank, Tweed, Hadley & McCloy LLP acted as lead counsel for First Infrastructure Capital.

About WhiteWater Midstream

WhiteWater Midstream is an Austin based, independent midstream company that provides transportation services to domestic oil and gas plays.

About Denham Capital Management

Denham Capital is a leading energy and resources-focused global private equity firm with more than $9.7 billion of invested and committed capital across 10 fund vehicles and offices in Houston, London, Boston and Perth. The firm makes direct investments in the energy and resources sectors, including businesses involving oil and gas, power generation and mining, across the globe and all stages of the corporate lifecycle. Denham’s investment professionals apply deep operational and industry experience and work in partnership with management teams to achieve long-term investment objectives.

About Ridgemont Equity Partners

Ridgemont Equity Partners is a Charlotte-based middle market buyout and growth equity investor. Since 1993, the principals of Ridgemont have invested approximately $4.4 billion. The firm focuses on equity investments up to $250 million in industries in which it has deep expertise, including business and industrial services, energy, healthcare, and technology and telecommunications.

About First Infrastructure Capital

First Infrastructure Capital Advisors, LLC is a Houston-based investment firm specializing in greenfield projects and companies operating in the midstream, downstream, electric power, telecommunications, and renewable energy industries. First Infrastructure Capital Advisors, LLC is affiliated with Quanta Services and operated separately as an SEC-registered investment adviser, which manages funds affiliated with First Infrastructure Capital, L.P.

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