[Context: On December 18, Five Point Energy-backed WaterBridge announced $345m in new equity capital for strategic acquisitions including from sovereign wealth fund GIC and Magnetar. The company announced deals to buy water infrastructure from Blackstone-backed Jetta Permian and Warburg’s Tall City III. Further details, advisors and related links are below.]
WaterBridge Announces Closing of $345 Million of Additional Equity Capital to Fund Strategic Acquisitions; $150 Million Preferred Equity and $195 Million Common Equity will Fund the Acquisition of Produced Water; Infrastructure from Multiple Southern Delaware Producers
HOUSTON, Dec. 18, 2019 /PRNewswire/ — WaterBridge Holdings LLC (together with its subsidiaries, “WaterBridge”) announced today that it has raised $345 million of equity capital through the issuance of $195 million of common equity to: funds affiliated with Five Point Energy LLC; an affiliate of GIC; and WaterBridge management, as well as $150 million of preferred equity to Magnetar Capital, a leading alternative asset manager. Proceeds will be used to fund acquisitions of produced water infrastructure from Primexx Energy Partners, Tall City Exploration III and Jetta Permian, as well as organic growth projects in the Southern Delaware Basin. In addition, WaterBridge has the ability to issue, and Magnetar Capital has the right to acquire, an additional $100 million of preferred equity to fund future growth.
David Capobianco, CEO and Managing Partner of Five Point Energy and Chairman of WaterBridge, said, “Our ability to raise attractive capital in a challenging market is a clear reflection of our team’s success in building the premier produced water handling network in one of the most economic and de-risked basins available to producers. The capacity and redundancy offered by our system will continue to be instrumental in supporting current and future customers’ growing development programs in the Southern Delaware Basin.”
Acquisitions from Leading Private Producers
Concurrent with the closing of the preferred equity issuance, WaterBridge acquired produced water infrastructure from Primexx Energy Partners, Ltd. The assets are located in Reeves County and include approximately 70 miles of pipeline and six disposal wells with 150,000 barrels per day (bpd) of permitted capacity. Contemporaneous with the acquisition, WaterBridge and Primexx entered into a 20-year produced water management agreement at market rates for Primexx’s operated acreage within an extensive area of mutual interest.
Additionally, WaterBridge recently acquired produced water infrastructure from Tall City Exploration III LLC and Jetta Permian LP in separate transactions. The assets are located in Reeves County and together include 29 miles of pipeline and two disposal wells with 40,000 bpd of permitted capacity. Concurrent with the closing of these transactions, WaterBridge and each of the operators entered into 15-year produced water management agreements at market rates for operated acreage within an extensive area of mutual interest.
With the closing of these transactions, WaterBridge has over 600,000 acres under long-term dedication in the Southern Delaware Basin. WaterBridge’s integrated water infrastructure provides 1.7 million bpd of produced water handling capacity over 800 miles of large-diameter pipelines and 70 handling and disposal facilities.
“We are excited to welcome Magnetar Capital, a renowned institutional investor with extensive midstream experience, to the team,” said Steven Jones, Co-President and Chief Financial Officer of WaterBridge. “The addition of a top-tier capital provider who shares our vision on the future growth of WaterBridge will allow us to continue adding high-quality producers such as Primexx, Jetta and Tall City as customers on our integrated produced water handling network.”
White & Case LLP served as legal advisor to WaterBridge and Five Point Energy in connection with the preferred equity transaction. Winston & Strawn LLP served as legal advisor to WaterBridge in connection with each of the Primexx, Tall City and Jetta transactions.
Kirkland & Ellis LLP served as legal advisor to Magnetar Capital.
About Five Point Energy LLC
Five Point Energy is a leading private equity firm focused on the midstream energy sector. The firm was founded by industry veterans who have had successful careers investing in, building and running midstream companies. Five Point’s strategy is to acquire and develop in-basin assets, provide value-added growth capital, and build world-class midstream companies with premier management teams and industry-leading E&P partners. The firm is focused on providing in-basin crude oil, natural gas, liquids and water management midstream solutions to E&P companies in the Permian Basin, Eagle Ford, Mid-Continent and Rockies. Based in Houston, Five Point Energy manages approximately $3.5 billion of capital across multiple investment funds.
WaterBridge is a portfolio company of Five Point Energy founded in January 2016 and headquartered in Houston, TX. WaterBridge develops, owns and operates permanent, integrated water infrastructure networks in the Southern Delaware and Arkoma basins to address the produced water management requirements of its blue-chip customer base under long-term, fee-based contracts. WaterBridge benefits from a first-mover advantage in the emerging water midstream sector with the most experienced management team in the industry.
GIC is a leading global investment firm established in 1981 to manage Singapore’s foreign reserves. As a disciplined long-term value investor, GIC is uniquely positioned for investments across a wide range of asset classes, including equities, fixed income, private equity, real estate and infrastructure. In infrastructure, GIC’s primary strategy is to invest directly in operating assets with a high degree of cash flow visibility and which provide a hedge against inflation. GIC has investments in over 40 countries. Headquartered in Singapore, GIC employs over 1,500 people across 10 offices in key financial cities worldwide.