Market Overview

Lotus Midstream to Acquire Centurion Pipeline


Crude oil logistics provider Lotus
Midstream, LLC
("Lotus") today announced it has entered into a
definitive agreement to acquire the Centurion pipeline system and a
Southeast New Mexico crude oil gathering system from Occidental
Petroleum Corporation
("Occidental") (NYSE:OXY). The transaction is
expected to close later in the third quarter of 2018, subject to
customary closing conditions.

The Centurion pipeline system is a large-scale, integrated network of
approximately 3,000 miles of crude oil gathering and transportation
pipelines that extend from southeast New Mexico across the Permian Basin
of West Texas to Cushing, Oklahoma. Integrated assets also include two
crude oil storage terminals strategically located in the Midland, Texas,
and Cushing, Oklahoma market centers with a combined storage capacity of
approximately seven million barrels and more than 125 truck stations.
The system is designed to connect the nation's premier supply basin to
key market centers.

The Southeast New Mexico gathering system includes more than 50 miles of
crude oil gathering pipelines with connections to the Centurion pipeline
system and a third-party intrabasin system and related infrastructure.

The acquisition is supported by long-term revenue commitments from
multiple customers and a long-term acreage dedication from Occidental.

"Lotus is very excited about this acquisition," said Lotus CEO Mike
Prince. "Centurion is a terrific network of connected assets that serve
the Permian, the most prolific basin in North America. In addition, it
is staffed with experienced, knowledgeable people throughout the
organization. We look forward to partnering with them to expand the
existing footprint by providing outstanding customer service to both
current and new customers."

Flatrock Midstream
sponsored Lotus with an initial capital
commitment of $400 million in February 2018 and will provide additional
financial support for the acquisition.

"The Lotus team has a long and significant history of success across the
midstream value chain, with a focus on strategic platforms with strong
growth potential," said EnCap Flatrock Midstream Managing Partner Greg
King, who is also a member of the Lotus board of directors. "We are
excited about this acquisition and look forward to assisting the Lotus
team as it expands the system's customer base and grows system volumes."

Paul Hastings LLP served as legal adviser to Lotus with partner Jimmy
Vallee in the lead role from the firm's Houston office. Barclays Capital
Inc., acted as financial adviser.

About Lotus Midstream

Based in Sugar Land, Texas, Lotus Midstream is an independent energy
company focused on the development of midstream infrastructure and
services necessary to transport crude oil and condensate from the
wellhead to market. The company's mission is to leverage the management
team's thorough understanding of the crude oil value chain to identify
optimal markets for supply and demand to maximize producer netbacks.
Lotus Midstream is backed by EnCap Flatrock Midstream. For more
information please visit

About EnCap Flatrock Midstream

EnCap Flatrock Midstream provides value-added growth capital to proven
management teams focused on midstream infrastructure opportunities
across North America. The firm was formed in 2008 by a partnership
between EnCap Investments L.P. and Flatrock Energy Advisors, LLC. Based
in San Antonio with offices in Oklahoma City and Houston, the firm
manages investment commitments of nearly $9 billion from a broad group
of prestigious institutional investors. EnCap Flatrock Midstream is
currently making commitments to new management teams from EFM Fund IV, a
$3.25 billion fund. For more information please visit

View Comments and Join the Discussion!