Riverstone Energy sells Meritage Midstream

Riverstone Energy RSE

Riverstone Energy sells Meritage Midstream – Riverstone Holdings LLC, manager of Riverstone Energy Limited, has agreed the sale of 100% of its indirect membership interests in Meritage Midstream ULC to SemCAMS Midstream ULC, a newly formed joint venture between SemGroup Corporation (NYSE: SEMG) and KKR, for C$600 million (US$449 million).

The transaction is expected to close during the first quarter of 2019, subject to customary approvals and closing conditions. The consideration to be received by REL is composed of cash approximately consistent with Meritage III’s current valuation.

Carlin G. Conner, chief executive officer of SemGroup, said, “This transaction captures an attractive valuation for our SemCAMS business and accelerates our Canadian strategy in one of North America’s premier energy basins. The acquisition of Meritage enables SemCAMS Midstream to expand and optimize its portfolio of assets, broaden its service offerings and create a more attractive Canadian growth platform. In addition, it delivers on our commitment to strengthen our balance sheet. We are pleased to partner with KKR, an industry-leading investor with extensive experience in the energy sector.”

Brandon Freiman, head of North American Infrastructure at KKR, said, “We have been an active investor in the Canadian energy space for the last decade and are big believers in the Montney as a growing, low-cost natural gas play that is relevant on a global scale. The combination of the highly complementary SemCAMS and Meritage businesses creates a leading midstream platform in the core of the Alberta Montney that is well-positioned to serve its growing infrastructure needs. We are thrilled to be partnering with SemGroup and the SemCAMS management team to build a nimble, well capitalized, customer-focused midstream business together in Western Canada in the coming years.”

Dave Gosse, president of SemCAMS Midstream, added, “Combining the SemCAMS and Meritage portfolios will diversify our customer base and broaden our service offerings to include oil batteries and liquids processing, while considerably expanding our gas processing capacity. Our contiguous asset mix, geographic proximity and operational leverage will allow us to optimize our system while creating increased reliability. This acquisition complements our competitive advantages, including our unique, flexible assets that now include additional infrastructure in a top quartile producing basin. Partnering with KKR will further enhance our ability to execute on our growth strategy and our focus on being the midstream provider of choice for area producers.”

RBC Capital Markets acted as exclusive financial advisor to Meritage III with respect to the transaction. Dentons Canada LLP and Vinson & Elkins LLP acted as legal advisors to Meritage III.

RSE : Riverstone Energy sells Meritage Midstream

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