Oil and gas pipeline operator Crestwood Equity Partners (CEQP) has agreed to buy the midstream unit of Oasis Petroleum (OAS) in a deal worth $1.8bn.
Under the deal, Oasis Petroleum will sell its 33.8 million common units held in Oasis Midstream (OMP) to CEQP.
CEQP will make a cash payment of $150m and issue an aggregate of 21 million common units of CEQP to Oasis Petroleum.
Public unitholders of Oasis Midstream will receive an aggregate of 12.9 million common units in Crestwood in exchange for 14.8 million common units held.
Oasis Petroleum will also receive a cash payment of $10m for its ownership of the general partner interest of Oasis Midstream.
The transaction includes the assumption of approximately $660m of Oasis Midstream’s debt and implies an enterprise value of approximately $6.9bn for the combined companies.
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Upon completion of the transaction, Oasis Midstream former unitholders will hold around 35% of common units of Crestwood. Of this, around 22% will be held by Oasis Petroleum.
Crestwood chairman, president and CEO Robert Phillips said: “This transaction enhances our competitive position in the Williston and Delaware Basins, enables Crestwood to capture substantial operational, commercial, and capacity synergies as we integrate the Oasis Midstream assets into our existing operations, and substantially expands the long-term contract acreage and inventory dedications of our gathering and processing portfolio.
“Importantly, we are completing this transaction during a period when macro oil and gas fundamentals are exceptionally supportive of upstream development and there is increasing demand for midstream infrastructure and services.”
The deal also provides Oasis Petroleum with the right to appoint two representatives to Crestwood’s board of directors.
Subject to customary closing conditions, the transaction is planned to be closed in the first quarter of 2022.
Recently, Oasis Petroleum acquired certain assets in the Williston Basin, US, from Diamondback Energy in an all-cash deal worth $745m.