EnLink To Buy Delaware Basin Assets From Matador For $143 Mln.

(RTTNews) - The EnLink Midstream companies, EnLink Midstream Partners LP (ENLK) (the Partnership) and EnLink Midstream LLC (ENLC) (the General Partner) on Tuesday announced that a subsidiary of the Partnership has agreed to acquire gathering and processing assets in the Delaware Basin from a subsidiary of Matador Resources Co (MTDR) for about $143 million, subject to certain adjustments.

The deal is expected to close in the fourth quarter and is subject to customary regulatory approvals and closing conditions.

The deal positions EnLink in the Delaware Basin as a full-service midstream provider, with Matador as a high-quality producer customer.

Also, the deal complements the Partnership's crude oil gathering, transportation and marketing services in the Delaware Basin region, which EnLink entered into when it acquired LPC Crude Oil Marketing LLC in February 2015.

The Delaware Basin System is located in Loving County, Texas, an area with robust drilling activity, strong well results and significant stacked pay potential.

The Delaware Basin System's assets include a cryogenic gas processing plant with abouty 35 million cubic feet per day (MMcf/d) of inlet capacity and approximately 6 miles of high-pressure gathering pipeline.

Matador will be the largest customer on the system and will dedicate about 11,000 gross acres currently under development pursuant to a 15-year, fixed-fee gathering and processing agreement. The Delaware Basin System has current inlet volumes of about 19 MMcf/d with two rigs currently running on the dedicated acreage.

Including this acquisition, the Partnership expects to deploy growth capital of $400 million - 500 million to expand its position in the Delaware Basin over the next 18 months.

It is anticipated that this expansion will include additional processing capacity, including the installation of a 120 MMcf/d natural gas processing plant currently owned by the Partnership, and the construction of additional gathering pipelines in Loving and Reeves Counties, Texas and Eddy and Lea Counties, New Mexico.

The transaction value represents a multiple of approximately seven to eight times adjusted EBITDA of the Delaware Basin System in three to four years, taking into consideration expected additional capital investments of $250 million - 350 million. The Delaware Basin System is currently in start-up operations.