Lucid Energy Group II acquires Agave Energy

Subsidiaries of midstream provider Lucid Energy Group II LLC closed on the purchase of certain assets of Agave Energy Co. and the acquisition of all of the outstanding stock of Agave Energy Holdings Inc.

Agave owns and operates natural gas gathering and processing assets in the Delaware Basin of southeastern New Mexico and the Powder River Basin of eastern Wyoming. Agave’s assets are located primarily in Eddy and Lea counties in New Mexico and include 280 million cubic feet of natural gas processing capacity, more than 1,300 miles of gas gathering pipeline and over 60,000 horsepower of compression. These assets are supported by dedications and volume commitments from several major producers.

Lucid II plans to expand Agave’s pipeline footprint in the Delaware Basin by adding new infrastructure in the near term, including a new 200 MMcf/d cryogenic processing plant at Agave’s Red Hills natural gas processing complex in Lea County. Construction of the new plant has begun, and Lucid expects to commission the new plant in mid-2017. All of Agave’s approximately 160 employees will remain with the company at closing.

Lucid II was formed in December 2015 by the team that leads its predecessor company, Lucid Energy Group LLC (Lucid I). Lucid I currently operates a large gathering and processing footprint in the Midland Basin, serving more than 30 customers across nine counties in West Texas. As a result of this transaction, the combined Lucid companies are the largest privately held natural gas processor working in the Permian Basin, with 660 million cubic feet of natural gas processing capacity and more than 3,300 miles of pipeline in operation. Lucid I and Lucid II are supported by equity capital commitments of over $850 million in the aggregate from EnCap Flatrock Midstream.

Lucid II was represented by Locke Lord LLP and Jefferies served as its financial advisor. Agave was represented by Latham & Watkins LLP and Butler Snow LLP.

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