American Midstream acquires Costar Midstream

American Midstream Partners LP

American Midstream Partners LP (NYSE: AMID) has acquired Costar Midstream LLC from Energy Spectrum Partners VI LP and Costar management for $470 million. The acquisition closed Oct. 14.

Costar is an onshore gathering and processing company with its primary gathering, processing, fractionation, and off-spec condensate treating and stabilization assets in East Texas and the Permian Basin, with a significant crude oil gathering system project underway in the Bakken shale play.

Costar’s operating assets include the Longview gas gathering, processing, and fractionation complex and the Chapel Hill gas gathering, processing, and fractionation system, both located in East Texas. In addition, Costar operates the Yellow Rose gas gathering and processing system located in the Permian Basin. Costar is also in the process of constructing an oil gathering system in the Bakken, as well as a rail terminal in East Texas and an off-spec condensate blending facility in the Permian.

The acquisition was funded with 6.9 million American Midstream common units issued directly to Energy Spectrum and Costar senior management, which are subject to customary lock-up provisions, along with $272 million of cash from borrowings under the Partnership’s revolving credit facility and proceeds from the August 2014 private placement of common units.



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