GLOBAL INFRASTRUCTURE PARTNERS TO ACQUIRE MEDALLION GATHERING & PROCESSING, LLC

NEW YORK, NY; IRVING, TX; HOUSTON, TX; TULSA, OK, Oct 3 (Bernama-GLOBE NEWSWIRE) -- The Energy & Minerals Group (“EMG”), 51% owner, and Laredo Petroleum, Inc.  (NYSE: LPI) (“Laredo”), 49% owner, announced today that their affiliates have entered into a binding agreement to sell Medallion Gathering & Processing, LLC (“Medallion”) to an affiliate of Global Infrastructure Partners (“GIP”) for a cash purchase price of $1.825 billion (the “Base Consideration”) plus additional cash consideration that is linked to GIP’s realized profits at exit (the “Additional Consideration”).  GIP is a leading global, independent infrastructure investor that combines specialist industry experience and industrial best practice operational management to achieve superior risk-adjusted returns.  Funding of the Base Consideration is expected to occur on or before November 1, 2017 and includes $725 million of stapled debt financing provided by Jefferies LLC.  There can be no assurance as to when and whether the Additional Consideration will be funded.  All proceeds from the sale of Medallion, including both the Base Consideration and the Additional Consideration, will be distributed 51% to EMG and 49% to Laredo.

Medallion is the largest privately-held crude oil transportation system in the Midland Basin of West Texas, with over 800 miles of pipeline, approximately 670,000 dedicated acres and total areas of mutual interest approaching four million acres.  Medallion operates a newly-constructed crude oil gathering and transportation system that has been designed to support substantial volume growth and offers a differentiated service to a diverse mix of active, high quality producer customers by allowing them to access multiple Permian Basin long-haul takeaway pipelines and end-markets, providing them with flow assurance and enabling them to maximize realized pricing.  For these and other reasons, Medallion is widely regarded as the leading source of crude oil transportation in the Midland Basin.

Medallion will retain its name and operate as a GIP Portfolio Company headquartered in Irving, Texas.  The leadership team will remain in their current roles and are investing alongside GIP in this transaction.  EMG will continue to own Medallion Delaware Basin, LLC.  Both the Midland Basin and Delaware Basin systems will continue to be managed by the same leadership team. 

"This transaction is an exciting and transformational moment in Medallion’s evolution,” said Medallion President and CEO Randy Lentz.  “Combining Medallion’s current team and best-in-class service with GIP’s financial strength and commitment to operational excellence will be the catalyst for further expansion of Medallion’s midstream infrastructure in the Permian Basin and ability to provide an even greater level of service to our producer customers.”

“Medallion’s success to date is largely attributable to the support of our financial partner EMG and our key producer partnership with Laredo.  The strength, knowledge and expertise of these two companies has been instrumental in Medallion’s ability to construct a new pipeline system from the ground up in four years and transform it into the largest privately held crude oil gathering system in the Midland Basin.”    

http://mrem.bernama.com/viewsm.php?idm=30208