Altus Midstream, based in Houston, has agreed to taken over by privately-held EagleClaw Midstream. The deal is an all-stock transaction that values the combined business at $9 billion enterprise value.
Prior to the transaction, Altus was 79% owned by Apache (now called APA Corp). After the transaction is completed in Q1 2022, the current majority shareholders of EagleClaw, Blackstone and I Squared Capital, will own 75%. Apache will own 20%, and existing Altus public shareholders will own about 5%.
Altus owns gas gathering and processing assets in the Delaware Basin to service Apache’s production in Alpine High. It also has equity interests in four Permian-to-Gulf Coast pipelines. EagleClaw owns gas gathering and processing assets in the Delaware Basin.
Altus was spun off from Apache in November 2018 when it went public after being acquired by a SPAC or blank check company. At that time, it had a market capitalization of $3.5 billion. Currently, it has a market cap of $1.4 billion. That’s after the recent run-up in the stock price from $65 in late September to $86.53 right before the deal was announced.
The poor share performance since Altus went public is a result of the disappointing results of the Alpine High project of Apache. It was announced with great fanfare in 2016. The field turned out to have more gas than oil. In 2020, Apache wrote off $1.4 billion and Altus $1.3 billion from the assets values related to the project. Ironically, the recent rise in gas prices should lift prospects for Alpine High.
The combined business will have its head office in Midland where EagleClaw is based. The senior management of EagleClaw are based in Houston and will run the combined business, which will operate under a new, yet-to-be-determined name.