Lucid Energy Group LLC has finalized a $200 million revolving credit facility. The additional financing will be used to support Lucid’s aggressive growth strategy in the Permian Basin. Together with private equity commitments from EnCap Flatrock Midstream and management, the credit facility provides Lucid with $425 million in total available financing.
Wells Fargo Securities LLC and Cadence Bank NA participated in the four-year credit arrangement and acted as joint lead arrangers. Thompson & Knight LLP served as legal counsel to Lucid Energy Group, with partner John W. Rain leading the firm’s legal team from its Dallas, Texas, office. Vinson & Elkins LLP, led by Erec R. Winandy, a partner in the firm’s Dallas office, represented the lending group.
Lucid increased its capital sources to support the rapid expansion of its pipeline gathering system and natural gas processing facilities in West Texas, which serve production from the Midland Basin’s Wolfcamp and Cline shale formations. Lucid’s system includes more than 300 miles of high- and low-pressure pipeline delivering liquids-rich natural gas to two separate cryogenic processing complexes in Sterling and Irion counties.
In March 2014, the company commissioned a third cryogenic processing plant and a nitrogen rejection plant in Sterling County. The new plant brings Lucid’s total processing capacity to 120 million cubic feet per day.
Lucid’s gathering and processing facilities are supported by long-term acreage dedications and volume commitments from more than a dozen oil and gas producers, including Apache Corp. (NYSE: APA), Devon Energy (NYSE: DVN), and EP Energy Corp. (NYSE: EPE). Acreage dedications to Lucid exceed 800,000 acres across an eight-county area of the Midland Basin and include Wolfcamp Shale production centered in Irion, Reagan and Crockett counties, and Cline shale production centered in Sterling County.