I Squared Capital has sold to GE Energy Financial Services, a General Electric unit, a 28% equity stake in Whiptail Midstream, a company formed by I Squared Capital to manage and operate a newly constructed, 220 mile three-commodity (oil, gas, water) Gathering System in New Mexico, USA.
I Squared Capital had previously acquired the Gathering System from WPX Energy in March 2016 for approximately US$285 million in cash.
Whiptail Midstream is a subsidiary of Cube Midstream, a portfolio company of the ISQ Global Infrastructure Fund. The company is focused on providing midstream infrastructure solutions to operators in the oil window of the San Juan basin, Mexico.
The Gathering System, which was designed and constructed by WPX Energy will continue to actively support WPX’s multi-year drilling program on its approximately 96,000 net acres in the basin.
In addition, as an independent midstream company, Whiptail Midstream is actively looking to expand and offer other producers an efficient and reliable means of transporting commodities to market.
Besides the Gathering System GE will also collaborate with I Squared Capital to invest in other near-term opportunities for oil and gas infrastructure in the basin.
Adil Rahmathulla, Partner at I Squared Capital, said:
“GE’s tremendous industry depth and experience makes them an invaluable partner in Whiptail Midstream. This transaction is an important step in the execution of our strategy to position Whiptail as the premier gathering system in the San Juan Basin.”