Fund manager GIP to acquire Medallion Gathering and Processing for $1.825bn

Affiliates of The Energy & Minerals Group (EMG) and Laredo Petroleum have signed an agreement to sell Medallion Gathering & Processing to an affiliate of fund manager Global Infrastructure Partners (GIP) for $1.825bn.

EMG holds 51% interest in Medallion, with the remaining 49% owned by Laredo.

The proceeds from the sale will be distributed to EMG and Laredo on the basis of their ownership rights.

Operating as a crude oil transportation system in the Midland Basin of West Texas, Medallion has more than 800m of pipeline, around 670,000 dedicated acres and total areas of mutual interest approaching four million acres.

Medallion president and CEO Randy Lentz said: “Combining Medallion’s current team and best-in-class service with GIP’s financial strength and commitment to operational excellence will be the catalyst for further expansion of Medallion’s midstream infrastructure in the Permian Basin and ability to provide an even greater level of service to our producer customers.”

The newly constructed gathering and transportation system is aimed at supporting volume growth.

It provides flow assurance to producers by allowing them to access multiple Permian Basin long-haul takeaway pipelines and end-markets.

Even after the transaction is closed, the company will continue to be known with the same name and operate as a GIP portfolio company.

The company will operate under the current leadership team, with EMG as owner of Medallion Delaware Basin.

GIP chairman and managing partner Adebayo Ogunlesi said: “Our extensive experience as an energy infrastructure investor, access to significant capital and operational expertise make GIP uniquely well qualified to acquire Medallion and to build upon the strong foundation started with Randy Lentz, EMG and Laredo.”