Oryx Midstream, a Houston firm founded in part by Tulsa’s WPX Energy and other investors six years ago is acquiring crude oil gathering assets in the Permian Basin in a $135 million deal.
Targa Resources had been shopping its holdings and this week attorneys for both companies confirmed the sale. The sale included the crude oil gathering pipelines and storage terminals. Oryx had more than 1,200 miles of pipeline and 2.1 million barrels of storage before the acquisition and was considered to be the largest privately-held pipeline and storage terminal operator in West Texas and southeastern New Mexico.
Omar Samji, an attorney with the law firm Shearman & Sterling LLP which advised Oryx, said merger and acquisition deals continue to be driven by the ongoing need in the region for more pipelines and storage terminals.
“This deal, as well as others we have recently advised Oryx Midstream and other companies on, offer a good snapshot of how active midstream merger and acquisitions continue to be — particularly in the more mature and prolific basins, such as the Permian Basin,” Samji said in a statement to the Houston Chronicle.
Targa announced its intent to sell the crude oil gathering assets following a $78.6 million loss on $1.9 billion of revenue during the third quarter. The figures were down compared to the $54 million loss on nearly $3 billion of revenue during the third quarter of 2018.
Crude oil gathering, the use of smaller pipelines to move crude oil from a remote well to larger pipelines or storage terminals, makes up a small portion of Targa’s business. The company’s crude oil gathering pipelines in the Permian moved 65,000 barrels of crude oil during 2018, company figures show. By comparison, the company’s 28,500 miles of natural gas pipelines moved 3.9 trillion cubic feet while the company’s natural gas liquids pipelines moved 415,000 barrels of NGLs.
Founded in 2003 and headquartered in Houston, Targa Resources has nearly 2,500 employees across the United States. The company posted a $119 million loss on $10.5 billion of revenue in 2018.
Oryx was launched and owned by affiliates of Quantum Energy Partners, Post Oak Energy Capital, Concho Resources, WPX Energy of Tulsa and other investors in 2013.
The Midland pipeline operator recently completed construction on the first phase of a crude oil gathering system in an area of the Permian Basin known as the southern Delaware Basin, which includes parts of southern New Mexico and West Texas.
New York private equity firm Stonepeak Infrastructure Partners bought Permian Basin-focused pipeline operator Oryx Midstream in a $3.6 billion deal in April.