Approach to sell interest in Midland Basin oil pipeline

US-based oil and gas company Approach Resources is to sell interest in its partner Wildcat Permian Services to affiliates of JP Energy Development for approximately $210m.

Wildcat owns and operates an oil pipeline system in Crockett and Reagan counties, Texas, which includes around 50 miles of high-pressure steel pipeline.

The pipeline holds a throughput capacity of 100,000 barrels per day (bpd), and also truck terminal and LACT bay facilities, alongside receipt points and 40,000bpd of crude oil storage.

JP Energy and Approach have also entered into a revised crude oil purchase agreement, which calls for JP Energy to purchase and transport the company’s crude oil production from Crockett and Schleicher counties.

Approach Resources president and CEO Ross Craft said that sale of the pipeline will increase the strength of the company’s liquidity position and help it continue to provide firm crude oil takeaways from its core operating area.

"We appreciate the hard work and dedication of the Wildcat team, and look forward to our new partnership with JP Energy and their management team," Craft added.

Approach will receive $108m and Wildcat $102m as part of the deal.

Approach holds around 152,000 net acres in the Permian Basin, while Wildcat Midstream owns and operates a cryogenic processing facility in North Louisiana.

JP Energy purchases, gathers, transports, blends, stores and markets crude oil for producers and refiners in the Mid-Continent area.