Oil and gas pipeline operator Crestwood Equity Partners LP will buy Oasis Petroleum Inc.’s midstream unit to widen its presence in US shale basins.
The deal is valued at USD1.8 billion on a cash-and-stock basis. Oasis Petroleum will receive USD150 million in cash and an aggregate of 21 million units in exchange for 33.8 million units held in its midstream company. Oasis will also receive a USD10 million cash payment for its ownership of the General Partner interest of Oasis Midstream.
Shareholders of Oasis Midstream will receive an aggregate of 12.9 million Crestwood units in exchange for 14.8 million shares held. Unitholders of Oasis Midstream will own about 35% of Crestwood's units, of which, about 22% will be owned by Oasis Petroleum.
For Crestwood, the deal will add more than USD20 million in annual cash flow in the upcoming few years. Crestwood has also identified about USD25 million in annual cost savings shortly after the transaction closes in 2022.
After the transaction is finalized, Crestwood will increase its distribution to USD2.62/unit annually, an about 5% increase year-over-year.
