PBIOS - October 2021 - 149

IndustryFocus: Companies, People and Products
Delaware Acquisition Adds
To U.S. Energy's Portfolio
ARLINGTON, TX.-U.S. Energy Development
Corp. has announced the strategic
acquisition of a $50 million asset in
Loving County, Tx., in the core of the
Delaware Basin.
According to U.S. Energy, the project
has wells targeting three of the basin's
most prolific benches: the third Bone
Spring, Wolfcamp A and Wolfcamp XY.
The new deal brings U.S. Energy's total
investment in the Permian Basin to $135
million during the past year.
U.S. Energy notes that the acquisition
marks its fifth major deal in the calendar
year. The firm adds that it plans to invest
an additional $400 million among the
Permian, Powder River, Eagle Ford, and
DJ basins during the next two years. ❒
ConocoPhillips Acquires Delaware Basin Acreage
HOUSTON-ConocoPhillips has made
what it calls a complementary, highly
accretive acquisition of Shell Enterprises
LLC's Delaware Basin position for $9.5
billion in cash. The assets include roughly
225,000 net acres and producing properties
located entirely in Texas, as well as more
than 600 miles of operated crude, gas
and water pipelines and infrastructure.
The company says it estimates 2022 production
from these assets will be approximately
200,000 barrels of oil equivalent
a day, roughly half of which is operated.
" We were presented with a unique
opportunity to add premium assets at a
value that meets our strict cost of supply
framework and brings financial and operational
metrics that are highly accretive
to our multiyear plan, " says ConocoPhillips
chairman and chief executive officer Ryan
Enbridge Inc. Obtains Major Export Facility From Moda
HOUSTON & SAN ANTONIO-Liquids
terminaling and logistics company
Moda Midstream LLC and its financial
sponsor, EnCap Flatrock Midstream, have
entered into a definitive agreement to sell
the Moda Ingleside Energy Center (MIEC)
and other Moda assets to Enbridge Inc.
for an enterprise value of approximately
$3 billion, subject to closing adjustments.
Located in Ingleside, Tx., MIEC is
the nation's largest crude export terminal
by volume, having loaded more than 25%
of all U.S. Gulf Coast crude exports in
2020, Moda notes. It adds that MIEC
has an aggregate storage capacity of more
than 15 million barrels and an export capacity
of 1.6 MMbbl a day.
According to the company, the asset
serves as a critical link connecting Permian
and Eagle Ford production to international
markets. MIEC's proximity to open water,
combined with its very large crude carrier
capability and rapid loading rates, position
it as one of the globe's key export facilities.
MIEC provides customers wellhead-towater
access and direct connectivity to
next-generation long-haul crude pipelines,
including Cactus I, Cactus II, Gray Oak,
EPIC and the Harvest Ingleside pipeline.
Moda notes that other assets in the
transaction include Moda's Taft Terminal
near MIEC; a minority, non-operating
interest in the Cactus II Pipeline; a 100%
interest in Moda's Viola Pipeline; and
Moda's St. James Development Project,
a brownfield joint-development opportunity
to build independent third-party logistics
solutions for customers in the St.
James, La., area. Both the Cactus II and
Viola pipelines connect to MIEC.
" MIEC is a flagship asset, " says Moda
Midstream President, Chief Executive
Officer and Founder Bo McCall. " We
are very proud of the safe and responsible
growth we have achieved since we purchased
the asset less than three years
ago. The site was originally designed by
the U.S. Navy to support a carrier battle
group and, despite the uncertainty following
its closure, has developed into
the nation's largest exporter of crude oil,
creating jobs and economic prosperity
for the Coastal Bend. "
❒
Lance. " Our financial strength allowed
us to structure a competitive offer for
this transaction and we are very excited
to enhance our position in one of the best
basins in the world with the addition of
Shell's high-quality assets and talented
workforce. The transaction will be funded
from available cash while still retaining
a significant level of cash on the balance
sheet for general purposes. Our underlying
business drivers will be stronger and the
expanded cash flows derived from this
transaction mean shareholders will benefit
from higher returns of capital consistent
with our commitment to return of capital
of at least 30% of cash from operations. "
According to ConocoPhillips, the transaction
significantly enhances the company's
10-year plan, which is based on an
oil price of $50 a barrel West Texas Intermediate
crude. Based on the same oil
price assumption, this acquisition is highly
accretive on earnings, operating cash
flow, free cash flow, return on capital
employed and returns of capital to shareholders
versus the prior plan.
At recent strip pricing and estimated
2022 production, next year's cash from
operations from the acquired assets is
estimated at $2.6 billion with free cash
flow of $1.9 billion based on a preliminary
estimate of 2022 capital, ConocoPhillips
reports.
The company says it expects to deliver
significant incremental upside when the
acquired assets are combined with its
multi-basin Lower-48 portfolio and further
operating efficiencies are identified and
implemented.
❒
Andros Capital Partners Closes On Permian JV
HOUSTON-Andros Capital Partners
LLC says it has closed a joint venture
with Midland-Petro D.C. Partners LLC,
under which Andros affiliate Andros Permian
LLC will fund approximately $150
million to participate in a development
drilling program targeting the Spraberry
and Wolfcamp formations in Midland
County, Tx.
" MPDC has assembled a world-class
position in the core of the Midland Basin,
and we are excited to be a part of its development, "
relates Andros Managing
Partner Phillip A. Gayle. " This transaction
underscores Andros' commitment to investing
in high-quality assets in partnership
with talented operators. It also highlights
our ability to construct a creative capital
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OCTOBER PBIOS 2021 149
solution to enable our partner to advance
their strategic objectives. "
Willkie Farr & Gallagher LLP acted
as legal counsel to Andros, the company
says, while Petrie Partners acted as financial
adviser to MPDC and Vinson &
Elkins LLP acted as legal counsel. ❒
PBIOS - October 2021

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