Milestone: Ares-backed EPIC divests pipeline stakes to Noble Midstream, Altus Midstream, Rattler Midstream


[Context: On February 4, Ares Management-backed EPIC Midstream announced that Noble Midstream Partners LP (NYSE: NBLX), Altus Midstream Company (Nasdaq: ALTM), and Rattler Midstream LP, a subsidiary of Diamondback Energy, Inc. (Nasdaq: FANG), excercised options to acquire equity stakes in a crude and NGL pipeline. Further details, advisors and related links are below.]

EPIC Announces Option Exercise by Affiliates of Noble Energy Inc., Apache Corporation and Diamondback Energy in Both the EPIC Crude and NGL Pipelines; Final phase of the NGL Pipeline remains on schedule and construction of the Crude Pipeline begins this month.

SAN ANTONIO–February 04, 2019 –(BUSINESS WIRE)--EPIC Midstream Holdings, LP (“EPIC” or “the Company”) today announced that Noble Midstream Partners LP (NYSE: NBLX) exercised its option for a 30% equity stake in the EPIC Crude Pipeline Project and a 15% equity stake in the EPIC NGL Pipeline while Altus Midstream Company (Nasdaq: ALTM), through one of its subsidiaries, and Rattler Midstream LP, a subsidiary of Diamondback Energy, Inc. (Nasdaq: FANG), exercised options for 15% and 10%, respectively, in the EPIC Crude Pipeline Project. Closing of the equity interest in each project is anticipated in February 2019 and subject to certain conditions precedent. The pro forma ownership for both projects is listed in the tables below.

EPIC Crude Pipeline:

Company Equity Ownership
EPIC 45%
Noble Midstream Partners LP 30%
Altus Midstream Company 15%
Rattler Midstream LP 10%
EPIC Y-Grade Pipeline:

Company Equity Ownership
EPIC 75%
Noble Midstream Partners LP 15%
Salt Creek Midstream LLC 10%

“The strategic value of these projects to our shippers is clear through the exercising of the options by our partners,” said Phillip Mezey, Chief Executive Officer of EPIC. “Both projects remain on schedule and are critical to the continued development of the Permian Basin and Eagle Ford Shale.”

“We are thrilled to have our strategic partners as equity owners in developing these critical infrastructure assets. We believe the alignment of interest created by these equity investments will continue to be mutually beneficial over the long term,” said Nate Walton, Partner and Co-Head of North American Private Equity at Ares Management Corporation (NYSE: ARES).

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 Oil 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 Corporation (NYSE: ARES).

About Noble Midstream Partners

Noble Midstream is a growth-oriented master limited partnership formed by Noble Energy, 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 Altus Midstream Company

Altus Midstream Company is a pure-play, Permian Basin midstream C-corporation. Through its consolidated subsidiaries, Altus owns substantially all of the gas gathering, processing and transportation assets servicing Apache Corporation’s production in the Alpine High play in the Delaware Basin and owns, or has the option to own, joint venture equity interests in five Permian Basin pipelines, four of which go to various points along the Texas Gulf Coast.

About Diamondback Energy Inc.

Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. Diamondback’s activities are primarily focused on the horizontal exploitation of multiple intervals within the Wolfcamp, Spraberry, Clearfork, Bone Spring and Cline formations.

About Salt Creek Midstream, LLC

Formed in 2017, Houston-headquartered Salt Creek Midstream, LLC is a joint venture of ARM Energy Holdings, LLC and funds managed by the Private Equity Group of Ares Management Corporation. Salt Creek is a full-service midstream provider in the Delaware Basin, offering gas and crude gathering, compression, cryogenic processing and treating services, as well as water gathering and disposal services. Salt Creek currently spans over 380,000 acres in gas, approximately 415,000 acres in crude and 165,000 acres in water dedications across Culberson, Reeves, Ward, Winkler, Lea, Pecos and Eddy Counties within the Delaware Basin.

About Ares Management Corporation

Ares Management Corporation is a publicly traded, leading global alternative asset manager with approximately $125 billion of assets under management as of September 30, 2018 and 18 offices in the United States, Europe, Asia and Australia. Since its inception in 1997, Ares has adhered to a disciplined investment philosophy that focuses on delivering strong risk-adjusted investment returns throughout market cycles. Ares believes each of its three distinct but complementary investment groups in Credit, Private Equity and Real Estate is a market leader based on assets under management and investment performance. Ares was built upon the fundamental principle that each group benefits from being part of the greater whole.

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