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EagleClaw taking out rival Permian midstream operator Caprock for $950M

EagleClaw Midstream Services LLC agreed to acquire Permian Basin competitor Caprock Midstream LLC from Energy Spectrum Capital LP and Caprock Midstream management for $950 million in cash.

The deal adds nearly 300 miles of gas, crude, natural gas liquids and water gathering pipelines, in addition to two gas processing facilities and 23 million barrels of crude oil storage, to the privately held EagleClaw's portfolio. Caprock's assets, which are in West Texas' Reeves and Ward counties, also include water disposal facilities with a capacity of 210 million barrels per day.

"This transaction expands our business in every aspect, from asset footprint, to customer diversity, to breadth of service offering, while remaining true to EagleClaw’s core mission of providing customer-focused midstream services in the Permian basin," EagleClaw founder and CEO Bob Milam said in a Sept. 5 statement.

EagleClaw is also ramping up its Permian presence through the joint venture Permian Highway pipeline project, which would transport 2 Bcf/d of gas from the booming shale play to the Texas Gulf Coast and Mexican markets starting in late 2020. Kinder Morgan Inc. would lead the project, with Apache Corp. participating as a third partner.

EagleClaw is backed by Blackstone Energy Partners.

The Caprock transaction would be funded with equity and committed debt financing from Barclays PLC and is expected to close in 2018.