Gravity Oilfield Services Announces Sale of Water Midstream Division
Gravity Oilfield Services Inc. ("Gravity"), an innovative energy infrastructure company, has embarked on a new chapter by agreeing to sell its Gravity Water Midstream division to Delek Logistics Partners, LP (NYSE: DKL). This strategic move marks a significant milestone in Gravity's evolution, enabling both companies to better align with their growth objectives.
Transition to Delek Logistics: A Powerful Partnership
The acquisition is a testament to the scaling efforts within Delek Logistics, as they aim to build an extensive water midstream platform primarily in the Midland Basin. Gravity's CEO, Rob Rice, expressed gratitude towards the dedicated team for their commitment in establishing a substantial commercial water management system.
Commitment to Water Management and Infrastructure
Gravity’s decision to transfer its water midstream assets does not compromise its dedication to power generation services. Gravity retains ownership of its power infrastructure, thus continuing to provide essential services in this vital sector. The transition highlights the importance of efficient water management solutions, particularly in resource-intensive areas like the Midland Basin.
Gravity's Remarkable Growth Journey
Since its collaboration with Clearlake Capital Group, L.P. in 2017, Gravity has significantly expanded its water infrastructure operations. This expansion includes developing an intricate network of over 200 miles of pipelines, 46 saltwater disposal facilities, and storage capacity exceeding six million barrels.
Industry Impact and Future Directions
This robust infrastructure has positioned Gravity as one of the leading operators in the region. The move to divest its water midstream operations will enable the company to focus on enhancing its remaining services while ensuring that the water management solutions continue to adapt to industry demands.
Leadership Insights and Acknowledgements
José E. Feliciano and Colin Leonard from Clearlake acknowledged the exceptional work that Gravity's team executed, emphasizing the collaborative spirit that led to the successful growth of the water midstream business.
Piper Sandler's Role in the Transaction
In organizing this significant transaction, Piper Sandler & Co played a crucial role as Gravity's exclusive financial advisor. Legal guidance was provided by Vinson & Elkins LLP, ensuring a smooth process during this pivotal transition.
About Gravity Oilfield Services
Gravity Oilfield Services is dedicated to providing essential energy infrastructure services to oil and natural gas firms engaged in onshore activities. With noticeable growth across various U.S. oil plays, Gravity has cemented its reputation as a reliable partner in both water midstream solutions and power generation.
About Clearlake Capital Group
Clearlake Capital Group has established itself as a foundational partner for numerous investments since its inception in 2006, extending its reach across various sectors and business strategies. Its patient approach towards investment, combined with operational improvements, has propelled many of its portfolio companies to new heights.
Frequently Asked Questions
What does the sale of Gravity Water Midstream entail?
The sale involves transferring Gravity's water midstream division to Delek Logistics while maintaining ownership of its power infrastructure assets.
How will this acquisition benefit Delek Logistics?
This acquisition allows Delek Logistics to expand its capabilities in water management, particularly in the Midland Basin, enhancing operational scale.
What is Gravity's focus moving forward?
Gravity will concentrate on its remaining power infrastructure services, ensuring continued growth and service enhancement in this sector.
How did Gravity's partnership with Clearlake influence its growth?
Clearlake's strategic support has been instrumental in Gravity's expansion of its water infrastructure, enabling it to become a leading operator in water disposal services.
Who advised Gravity on this transaction?
Piper Sandler & Co served as the exclusive financial advisor, backed by legal counsel from Vinson & Elkins LLP, to navigate the sale process effectively.
