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Oklahoma Firms Unload Midland Basin System for $1.8 Billion

A $1.8 billion deal’s been announced by Houston-based Energy and Minerals Group and Laredo Petroleum of Tulsa in which they are selling the largest privately held crude oil transportation system in the Midland Basin of Texas.

The buyer is an affiliate of infrastructure fund manager Global Infrastructure Partners which is paying $1.825 billion for the Texas-based Medallion Gathering and Processing LLC.

Energy and Minerals Group is a 51% owner while Laredo Petroleum has 49% ownership. Global Infrastructure Partners is considered to be a leading global, independent infrastructure investor.

Funding of the purchase by GIP is expected before Nov. 1 and includes $725 million of stapled debt financing provided by Jefferies LLC.

The Energy & Minerals Group (EMG) is a private investment firm with Regulatory Assets Under Management (“RAUM”) of $16.2 billion. EMG targets equity investments of $150 million to $1,000 million in the energy and minerals sectors with talented, experienced management teams, focused on hard assets that are integral to existing and growing markets.

Medallion is the largest privately-held crude oil transportation system in the Midland Basin of West Texas and includes more than 800 miles of pipeline as well as 670,000 dedicated acres and total areas of mutual interest approaching nearly four million acres.

Medallion has a newly-constructed crude oil and gathering transportation system that allows producers in the region to accept several Permian Basin long-haul pipelines. The operation will keep its name under the new ownership and operate as a GIP Portfolio company headquartered in Irving, Texas.

EMG will continue to own Medallion Delaware Basin, LLC.

“We congratulate Randy Lentz and the Medallion team for developing and commercializing a leading crude oil transportation business and we value Laredo’s many years of partnership,” said John Raymond, CEO and majority owner of EMG. “GIP is acquiring a tremendous business and affiliating itself with a talented team of energy executives and a dedicated, focused group of employees.”

Raymond and John Calvert formed EMG in 2006, making it a management company for a series of specialized private equity funds. EMG has nearly $15.8 billion in regulatory assets under management and another $10.4 billion in commitments were allocated cross the energy sector since the company’s inception.