EnCap Flatrock Midstream Announces Significant Transactions

EnCap Flatrock Midstream Makes Strategic Moves

EnCap Flatrock Midstream, often referred to as EFM, has taken a significant step forward in the midstream sector by executing two major agreements with Plains All American, L.P. (NYSE: PAA). This transaction involves the sale of Ironwood Midstream Energy Partners II, LLC and EFM's interests in Plains Series A Preferred Units. The deal is valued at over $800 million and is poised to conclude in the early part of 2025, pending customary regulatory approvals.

Impact on the Industry

The recent actions by EFM mark a pivotal moment for the midstream industry, especially given the current market dynamics. Gregory C. King, EFM's Managing Partner, expressed enthusiasm about the opportunity to unlock value for investors while maintaining a commitment to responsible capital stewardship. King shared, “Our focus every day is to be good partners and build great assets.” This sentiment reflects EFM's long-term vision and dedication to enriching their investors' interests.

Insights into Ironwood Midstream

Ironwood Midstream Energy Partners II plays a crucial role in the crude oil gathering and transportation landscape, particularly within the Eagle Ford shale region in South Texas. Established to focus on a consolidation strategy, Ironwood II has emerged as a significant player in the area, having successfully developed an extensive network of pipelines that spans nearly 500 miles. This proactive approach has enabled Ironwood II to cater to a diverse range of upstream customers.

Advisory Support

The transaction has seen the involvement of several prominent advisory firms. RBC Capital Markets has taken the role of financial advisor for Ironwood Midstream, while Haynes Boone has provided legal advice. EFM has engaged Wilkie Farr & Gallagher for legal counsel, and Plains All American drew on the expertise of Piper Sandler and Vinson & Elkins. Together, these firms contribute to ensuring the process is smooth and advantageous for all parties involved.

About EnCap Flatrock Midstream

Founded in 2008 through a partnership between EnCap Investments L.P. and Flatrock Energy Advisors, LLC, EnCap Flatrock Midstream is distinguished for its strategic investments in the midstream infrastructure sector across North America. Staying based in San Antonio, with additional offices in Oklahoma City and Houston, the firm holds over $9 billion in investment commitments. Their unwavering focus is to provide growth capital to management teams that demonstrate proficiency in managing midstream operations.

The Future Ahead

As the midstream industry continues to evolve, EFM is well-positioned to take advantage of emerging opportunities. With a solid foundation and proactive strategy, they aim to navigate the complexities of the energy landscape effectively.

Frequently Asked Questions

What transactions did EnCap Flatrock Midstream complete?

EnCap Flatrock Midstream completed two agreements to sell Ironwood Midstream Energy Partners II and its interests in Plains Series A Preferred Units to Plains All American.

What is the value of these transactions?

The total transaction value is over $800 million in cash.

When are the transactions expected to close?

The transactions are anticipated to close in the first quarter of 2025, subject to regulatory approvals.

Who are the advisors involved in the transactions?

RBC Capital Markets and Haynes Boone are advisors to Ironwood Midstream, while Piper Sandler and Vinson & Elkins advise Plains All American.

What is EnCap Flatrock Midstream's investment focus?

EnCap Flatrock Midstream focuses on providing capital for midstream infrastructure opportunities across North America, managing commitments exceeding $9 billion.

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