Noble Midstream Partners, Greenfield Midstream form joint venture to acquire Saddle Butte pipeline

Noble Midstream Partners LP and Greenfield Midstream LLC announced a joint venture--Black Diamond Gathering, LLC. The JV has entered into definitive agreements to acquire Saddle Butte Rockies Midstream, LLC and affiliates for $625 million.

Noble Midstream will fund 50% of the purchase price and will receive a 4.4% ownership promote in the JV. The Partnership’s 54.4% ownership of the JV will be held in a wholly owned Noble Midstream subsidiary, Laramie River DevCo LP. Greenfield Midstream will own 45.6% of the JV.

Saddle Butte assets include a large-scale integrated crude oil gathering system in the DJ Basin, consisting of approximately 160 miles of pipeline in operation, 300,000 barrels per day of delivery capacity, and approximately 210,000 barrels of crude oil storage capacity. Saddle Butte has approximately 115,000 dedicated acres from six customers under fixed fee arrangements, including approximately 72,000 dedicated acres from PDC Energy. Upon the closing of the acquisition, PDC Energy plans to expand its Saddle Butte acreage dedication to approximately 96,000 acres and extend its dedication by five years, bringing the dedication contract duration to approximately 12 years from close.

Noble Midstream will operate and control the Saddle Butte system upon closing, which is expected in the first quarter of 2018, subject to customary closing conditions, including the receipt of regulatory approvals. Noble Midstream and Greenfield Midstream will jointly provide commercial efforts to attract further producer dedications.

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