Delek Logistics Acquires Permian Basin Gathering Assets in $624.7 Million Deal
By Mary Holcomb, Digital Editor
Delek Logistics Partners LP has agreed to acquire 100% of the equity interests of 3Bear Delaware Holding on April 11, expanding Delek’s Permian Basin footprint.
Delek’s newly formed subsidiary, DKL Delaware Gathering LLC, is set to acquire 3Bear's crude oil and gas gathering, processing and transportation businesses, as well as water disposal and recycling operations in the Delaware Basin in New Mexico, for cash consideration of $624.7 million.
The asset base includes approximately 485 miles of pipelines, 88 million cubic feet per day of cryogenic natural gas processing capacity, 120,000 barrels (bbl) of crude storage capacity and 200,000 bbl/d of water disposal capacity. 3Bear's assets are anchored by roughly 350,000 dedicated acres and long-term fixed fee contracts.
"We are pleased to announce the acquisition of 3Bear,” Uzi Yemin, chairman, president and CEO of Delek Logistics General Partner, said. “The 3Bear management team has developed strong producer relationships and a world-class asset base in the heart of the Delaware Basin.”
Headquartered in Brentwood, Tenn., Delek Logistics Partners was formed by Delek US Holdings Inc. to own, operate, acquire and construct crude oil and refined products logistics and marketing assets.
The transaction marks Delek Logistics’ entry into the Delaware Basin.
"We are excited to expand our operations in one of the most prolific oil and gas producing basins, providing long-term growth that is highly complementary to Delek Logistics' current asset footprint," Yemin said.
According to Yemin, the average daily volumes of Delek Logistics’ Permian Gathering system have increased from 83,000 bbl/d to 135,000 bbl/d from Q4 2021 to Q1 2022.
“This level of growth and demand from producers provides us with confidence to move forward with this transaction,” he said.
This transaction is expected to be completed around mid-year 2022, subject to customary regulatory approvals.
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