RTTNews | Oct 26, 2021 08:38AM EDT

08:37 Tuesday, October 26, 2021 (RTTNews.com) - Texas-based Crestwood Equity Partners LP (CEQP) that owns and operates midstream businesses in multiple shale resource plays across the U.S. on Tuesday said it agreed to acquire Oasis Midstream Partners LP (OMP).

The transaction which is expected to close in the first quarter of 2022 is an equity and cash transaction valued at approximately $1.8 billion including the assumption of debt of about $660 million.

Oasis Midstream that owns, develops, and operates a diversified portfolio of midstream assets in North America is sponsored by Oasis Petroleum Inc., (OAS) an independent exploration and production company.

The transaction will largely be equity financed with approximately 33.8 million of newly issued Crestwood common units and $160 million of cash consideration.

The transaction is expected to add to to Crestwood's distributable cash flow per unit in 2022. It is also expected to increase the 2021E pro forma Adjusted EBITDA and positive free cash flow by approximately 40 percent. The pro-forma leverage is expected to be approximately 3.5x after the merger is completed.

The deal, which is in alignment with Crestwood's stated strategy of consolidating high quality midstream assets into its core operating areas, is expected to enhance its competitive position in the Williston and Delaware Basins.

Under the terms of the agreement, Oasis Petroleum Inc. will receive $150 million in cash plus an aggregate of 21.0 million common units in exchange for its 33.8 million common units held in Oasis Midstream. Oasis Midstream public unitholders will receive an aggregate of 12.9 million Crestwood common units in exchange for the 14.8 million Oasis Midstream common units outstanding.

Oasis Petroleum will receive a $10 million cash payment for its ownership of the General Partner interest of Oasis Midstream. Upon closing, Oasis Midstream former unitholders will own approximately 35% of Crestwood's outstanding common units, of which, approximately 22% will be owned by Oasis Petroleum.

J.P. Morgan Securities served as lead financial advisor, Intrepid Partners, LLC served as financial advisor, and Baker Botts L.L.P. served as legal advisor to Crestwood.

Shares of Crestwood Equity Partners LP are currently trading in pre-market at $30.89, up $0.57 or 1.88 percent from previous close.

Read the original article on RTTNews ( https://www.rttnews.com/3235615/crestwood-to-buy-oasis-midstream-partners-in-1-8-bln-deal.aspx)

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