HOUSTON–(BUSINESS WIRE)–Salt Creek Midstream, LLC (“Salt Creek”), a portfolio company owned by funds managed by the Private Equity Group of Ares Management, L.P. (“Ares”) and by ARM Energy Holdings, LLC (“ARM Energy”), today announced that it has entered into a letter of intent with Noble Midstream Partners LP (“Noble Midstream”) to form a 50/50 partnership on a crude oil pipeline and gathering system in the Delaware Basin.
Salt Creek will partner with Noble Midstream on the construction of a 200,000 bbl/d newbuild pipeline system in the Delaware Basin. The 95-mile, 20-inch diameter pipeline system will originate in Pecos County, Texas, with additional connections in Reeves County and Winkler County, Texas; providing shippers with access to multiple downstream outlets. Salt Creek and Noble Midstream anticipate the execution of definitive agreements and closing of the transaction to occur in the fourth quarter of 2018.
At closing, the project will be underpinned by approximately 180,000 dedicated acreage contributions from Noble Midstream and Salt Creek and five other Southern Delaware Basin producers, with a line of sight to additional dedications totaling approximately 100,000 acres. This includes partial dedication of Noble Energy’s Reeves County position totaling approximately 70,000 acres. The project footprint will be served by a combination of nearly 100 miles of pipeline in Pecos, Reeves, Ward and Winkler Counties, in-field crude gathering lines and a trunkline to Wink Hub that will provide critical downstream connectivity for producers in the Southern Delaware Basin.
Salt Creek CEO Zach Lee said, “Salt Creek is achieving great momentum over an incredibly rapid timeframe with our multiple developments spanning the Permian Basin. We are excited to be working in partnership with the Noble Midstream team in the Southern Reeves area. We have known and respected the Noble Midstream team for some time and look forward to building a world class crude oil business with them in the Delaware Basin.”
“We are excited to partner with Salt Creek on the formation of this joint venture and look forward to bringing both our commercial and operations expertise to the table.” stated Terry R. Gerhart, Chief Executive Officer of Noble Midstream. “The pipeline system will provide critical downstream connectivity and enhanced market optionality for producers in the Southern Delaware Basin.”
Salt Creek has commenced construction of the pipeline, with an expected operational date in the second quarter of 2019. The project provides access to 200,000 barrels of new crude oil storage with expansion potential to 300,000 barrels. The project’s development is supported by an average customer acreage dedication term of approximately 15 years.
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. 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 350,000 acres in gas dedications and approximately 300,000 acres in crude across Culberson, Reeves, Ward, Winkler, Lea, Pecos, and Eddy Counties within the Delaware Basin.
About Noble Midstream
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. For more information, please visit www.nblmidstream.com.
About Ares Management, L.P.
Ares Management, L.P. is a publicly traded, leading global alternative asset manager with approximately $121.4 billion of assets under management as of June 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. For more information, visit www.aresmgmt.com.
About ARM Energy Holdings, LLC
Headquartered in Houston, with offices in Calgary, Denver, Midland, and Pittsburgh, ARM Energy Holdings, LLC is a premier producer services firm, active in every sector of the energy value chain across all major North American oil and gas basins. Its integrated, diversified portfolio includes Asset Risk Management, LLC, providing risk management and hedging strategies for producers; ARM Energy Management LLC, providing physical oil and gas marketing, transportation and asset management services and trading; and ARM Midstream, LLC, providing midstream investment, infrastructure development and operations. For more information, please visit www.armenergy.com.
ARM Energy/Salt Creek
Sard Verbinnen & Co
Kelly Kimberly, +1-832-680-5120