UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 2019
Altus Midstream Company
(Exact name of registrant as specified in its charter)
| Delaware | 001-38048 | 81-4675947 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
One Post Oak Central, 2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (713) 296-6000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| Class A common stock, $0.0001 par value | ALTM | NASDAQ Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
On July 31, 2019, Altus Midstream Company (“Altus” or the “Company”) announced that its subsidiary, Altus Midstream Processing LP (“Altus Midstream Processing”), closed its option (the “Option”) with Enterprise Products Operating LLC (“Enterprise”) to acquire a 33 percent equity interest in Breviloba, LLC, a Texas limited liability company (“Breviloba”) formed by Enterprise to own and operate the Shin Oak NGL pipeline (the “Shin Oak Pipeline”).
Net to Altus Midstream Processing’s ownership interest, the exercise price of the Option was approximately $440.7 million, which included Altus Midstream Processing’s proportional share of capital spent by Breviloba prior to the Option closing to construct, commission, and start-up the Shin Oak Pipeline and capitalized interest on such capital spent.
The Shin Oak Pipeline comprises a 24-inch diameter mainline and related 20-inch lateral pipeline with an initial capacity of approximately 250,000 barrels per day (bbl/d) and provides takeaway capacity for natural gas liquids production from multiple basins, including the Permian. Supported by long-term customer commitments, the Shin Oak Pipeline is expected to ultimately provide up to 550,000 bbl/d of capacity, which is expected to be available in the fourth quarter of 2019. Following closing of the Option, the Shin Oak Pipeline is 33 percent owned by Altus Midstream Processing and 67 percent owned by Enterprise.
Cautionary Note Regarding Forward-Looking Statements
This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included or incorporated by reference in this report, including, without limitation, statements regarding our future financial performance, business strategies, projected costs and plans, and expectations for Altus, Altus Midstream Processing, and Shin Oak, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “seeks,” “possible,” “potential,” “predict,” “project,” “guidance,” “outlook,” “should,” “would,” “will,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, the Company can give no assurance that such expectations will prove to have been correct.
Whether actual results and developments will meet expectations depend on a number of risks and uncertainties which could cause actual results, performance, and financial condition to differ materially from expectations. See “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 when filed with the Securities and Exchange Commission for a discussion of risk factors that affect the Company’s business. Any forward-looking statement made in this report speaks only as of the date on which it is made. Factors or events that could cause actual results to differ may emerge from time to time, and it is not possible to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future development, or otherwise, except as may be required by law.
| Item 7.01. | Regulation FD Disclosure. |
On July 31, 2019, the Company issued a press release announcing that Altus Midstream Processing had exercised and closed the Option, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of Section 18, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
| (a) | Financial Statements of Businesses Acquired. |
To the extent required by this Item, financial statements of Breviloba will be filed as part of an amendment to this Current Report on Form 8-K not later than 71 calendar days after the date this Current Report is required to be filed.
| (b) | Pro Forma Financial Information |
To the extent required by this Item, pro forma financial information will be filed as part of an amendment to this Current Report on Form 8-K not later than 71 calendar days after the date this Current Report is required to be filed.
| (d) | Exhibits. |
| Exhibit No. |
Description | |
| 99.1 | Press Release, dated July 31, 2019. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ALTUS MIDSTREAM COMPANY | ||||||
| Date: July 31, 2019 | /s/ Ben C. Rodgers | |||||
| Ben C. Rodgers | ||||||
| Chief Financial Officer and Treasurer | ||||||
Exhibit 99.1
ALTUS MIDSTREAM ACQUIRES STAKE IN
ENTERPRISE’S SHIN OAK PIPELINE
Houston, Texas (July 31, 2019) – Enterprise Products Partners L.P. (NYSE: EPD) and Altus Midstream Company (NASDAQ: ALTM) announced the closing of Altus’ acquisition of a 33 percent equity interest in the Enterprise subsidiary that owns the Shin Oak natural gas liquids (“NGL”) pipeline, effective today. The 658-mile Shin Oak Pipeline transports growing NGL production from multiple basins, including the Permian, to Enterprise’s NGL fractionation and storage complex in Mont Belvieu, Texas.
NGLs for the Shin Oak system are sourced primarily from Enterprise’s Orla natural gas processing complex in Reeves County, Texas, as well as Apache Corporation’s Alpine High play, via a long-term NGL sales agreement committing 100 percent of NGLs from that acreage. Supported by long-term customer commitments, the pipeline will ultimately have capacity to transport up to 550,000 barrels per day (“BPD”) of NGLs by the fourth quarter of 2019.
“We are very pleased to have Altus as a partner in the Shin Oak Pipeline, which facilitates continued growth of Permian Basin NGLs that are expected to more than double by 2025,” said A.J. “Jim” Teague, chief executive officer of Enterprise’s general partner. “In addition to providing much-needed takeaway capacity for NGLs, Shin Oak is a key asset in Enterprise’s integrated midstream network, which provides unparalleled access to the most attractive domestic and international markets.”
“Altus is pleased to partner with Enterprise on the Shin Oak Pipeline,” said Clay Bretches, CEO of Altus Midstream. “Shin Oak is integrated with Enterprise’s existing pipelines and gas processing plants, which provide supply from multiple basins. This integration, along with connectivity to Enterprise’s fractionation complex in Mont Belvieu, drives substantial volume through the pipeline and provides superior flow assurance for customers, which is a significant competitive advantage for attracting additional third-party business.”
Enterprise Products Partners L.P. is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. Our services include: natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage and import and export terminals; crude oil gathering, transportation, storage and terminals; petrochemical and refined products
transportation, storage and terminals; and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems. The partnership’s assets currently include approximately 49,200 miles of pipelines; 260 million barrels of storage capacity for NGLs, crude oil, petrochemicals and refined products; and 14 billion cubic feet of natural gas storage capacity.
Altus Midstream Company is a pure-play, Permian-to-Gulf Coast midstream C-corporation. Through its consolidated subsidiaries, Altus owns substantially all of the gas gathering, processing and transportation assets servicing production from Apache Corporation (NYSE, Nasdaq: APA) in the Alpine High play in the Delaware Basin, owns equity interests in four Permian-to-Gulf Coast pipelines, and has the option to acquire 50 percent equity interest in the Salt Creek NGL pipeline. Altus posts announcements, operational updates, investor information and press releases on its website, www.altusmidstream.com.
This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical fact, included herein that address activities, events, developments or transactions that Enterprise Products Partners L.P. and Altus Midstream Company expect, believe, or anticipate will or may occur in the future, including anticipated benefits and other aspects of such activities, events, developments or transactions, are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including required approvals by regulatory agencies, the possibility that the anticipated benefits from such activities, events, developments or transactions cannot be fully realized, the possibility that costs or difficulties related thereto will be greater than expected, the impact of competition and other risk factors included in the reports filed with the Securities and Exchange Commission by Enterprise Products Partners L.P. and Altus Midstream Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Except as required by law, Enterprise Products Partners L.P. and Altus Midstream Company do not intend to update or revise their forward-looking statements, whether as a result of new information, future events or otherwise.
Contacts:
Enterprise
Randy Burkhalter, Investor Relations, (713) 381-6812 or (866) 230-0745
Rick Rainey, Media Relations (713) 381-3635
Altus
Gary Clark, Investor Relations, (281) 302-2286
Phil West, Media Relations, (713) 296-7276
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