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Diamondback's Rattler, Oryx to buy Permian-focused Reliance Gathering for $355M

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Diamondback's Rattler, Oryx to buy Permian-focused Reliance Gathering for $355M

Rattler Midstream LP and private equity-backed Oryx Midstream Services LLC established a 60/40 joint venture to acquire Permian Basin-focused Reliance Gathering LLC for $355 million.

The acquisition involves a crude oil gathering system with more than 230 miles of gathering and transportation pipelines, as well as about 200,000 barrels of crude oil storage in Midland, Martin, Andrews and Ector counties in Texas, according to an Oct. 3 news release. The current system throughput is more than 110,000 barrels per day from six oil and gas operators, which includes Rattler's parent Diamondback Energy Inc.

"Continuing its wellhead to water strategy, Diamondback, through Rattler, will now participate in transporting these crude oil barrels from the wellhead through the Reliance Gathering system and the Epic Crude Pipeline to docks and refineries around Corpus Christi," Travis Stice, CEO of Rattler's general partner, said in the release.

Oryx will be the operator of the system upon the deal closing, which is expected in the fourth quarter.

Rattler owns and operates midstream assets in the Midland and Delaware basins. Oryx is a Midland-based midstream crude operator backed by private equity firm Stonepeak Infrastructure Partners.

Jefferies LLC is the exclusive financial adviser, and Sidley Austin LLP is legal counsel to Reliance Gathering. Akin Gump Strauss Hauer & Feld LLP serves as legal counsel to Rattler, and Shearman & Sterling LLP acts as legal counsel to Oryx.