Almost lost in this week’s first quarter earnings report from Devon Energy was the firm’s sale of its interest in the Matterhorn Express Pipeline in Texas.
Devon’s first quarter financial release included the brief statement that it had sold its equity interest in the line for approximately $375 million.
“The transaction is subject to customary terms and conditions and is expected to close in the second quarter of 2025. Proceeds from
the divestiture will be used to further strengthen the company’s investment-grade financial position. The monetization of Devon’s equity ownership will not change the terms or conditions of the company’s secured capacity on the pipeline,” stated the quarterly financial statement.
Three other energy firms, I Squared, Enbridge and MPLX confirmed they had acquired the equity interests from Devon Energy and the private equity firm Ridgemont Equity. The 510-mile Matterhorn pipeline was put into service last fall and when fully contracted has a capacity of 2.5B cf a day, transporting natural gas from the Permian Basin to Wharton, Texas.
After the closing of the agreement, infrastructure company WhiteWater will own 65% while Enbridge will own 10% and MPLX will own 10%. WhiteWater is jointly supported by I Squared and investment firm FIC.
When the Matterhorn became operational last fall, it was expected the bottleneck of transporting natural gas out of the Permian should be relieved or as one observer put it, “it means more production can leave the region.” It was also anticipated that more natural gas production in the Permian might result because of the pipeline.
Partners; deal terms were not disclosed but speculation had said a deal could value Matterhorn at more than $5B including debt.
Following the deal’s closing, infrastructure company WhiteWater, Enbridge (ENB) and MPLX (MPLX) will own respective shares of 65%, 10% and 10% in the Matterhorn Express Pipeline; WhiteWater, whose equity interest will be jointly backed by I Squared and infrastructure investment firm FIC, will continue to operate the pipeline.