Comes a (Huge) New Investor for Cheniere

Comes a (Huge) New Investor for Cheniere

Houston-based Cheniere has grabbed its share of headlines recently and the latest is a doozy. First came the announcement earlier this month that Abu Dhabi Investment Authority (ADIA) had scooped up a 5.1% stake in the company valued at $615 million. The deal made ADIA Cheniere’s third-largest investor right behind Icahn Associates Holding with 8.25%. But not so fast, fellas. There’s a new kid in town and this one’s a chunk. After musing last year that it would “entertain serious offers” for a 41.2% stake in the LNG heavyweight, private equity firm Blackstone Energy Partners has officially handed over the car keys to Brookfield Asset Management. The position is valued at $7.8 billion. Blackstone invested a mere $1.5 billion in Cheniere eight years ago. Somewhere, Blackstone’s institutional investors must be weeping with joy while Brookfield bets big on a return to pre-COVID demand for LNG exports.

 

Cheniere Energy

Cheniere Energy, Inc. is a liquefied natural gas company headquartered in Houston, Texas. In February 2016 it became the first US company to export liquefied natural gas. As of 2018 it is a Fortune 500 company.

www.cheniere.com

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Learn more about Reese Energy Consulting and our natural gas and LNG expertise at www.ReeseEnergyConsulting.com.

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Opportunities to the Max

Opportunities to the Max

Houston-based Max Midstream has every intention to transform the Port of Calhoun into a major crude oil export center. With $1 billion worth of plans in motion, Max recently has acquired the Seahawk Pipeline and Terminal from private equity firm Oaktree Capital with a big, bold idea to offer shippers a more economical, less congested alternative to export sites at Houston/Galveston and Corpus Christi. The newly acquired pipeline connects the Kinder Morgan Crude and Condensate Interconnect in Edna, Texas, where Max also operates a crude oil terminal, to the Seahawk Terminal. Following construction of a new pipeline and added interconnects, Seahawk will flow up to 20 million barrels of Permian and Eagle Ford crude each month to a completely revitalized terminal system that includes its Edna site by 2023. Storage will increase to 9 million Bbls at Edna and 6 million Bbls at Seahawk. Max also is investing $360 million to widen and deepen the Port to accommodate Aframax and Suezmax ships. Phase 1 of the project is slated for completion in November.

Max Midstream

Max Midstream bridges the gap between upstream and downstream with strategic partnerships in the global refining sector. From the wellhead to Gulf, they deliver consistent quality crude oil quickly and efficiently, saving both time and money. Their high-capacity network of pipelines, storage and terminal facilities offer a seamless, one-stop solution for premium midstream operations.

maxmidstream.com

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Learn more about Reese Energy Consulting and our range of oil and gas midstream services at www.ReeseEnergyConsulting.com.

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Devon + WPX = 1

Devon + WPX = 1

Oklahoma is generating big noise today with a stunning announcement from two of the state’s largest independent oil and gas companies. Reese Energy Consulting is following news from Okla. City-based Devon Energy and Tulsa-based WPX Energy, which will merge in an all-stock deal to create a single producer powerhouse valued at $12 billion. Wall Street is practically giddy; stock prices have zoomed north for both companies at a time that’s been anything but kind to the oil and gas industry. We think a parade is in order. The merger makes Devon a force to be reckoned with in the Delaware-Permian with 400,000 net acres and production of 277,000 BPD. But this merger but also raises the bar for energy operators looking to return to the good graces of shareholders. The new, New Devon will be fixated on “consistently generating free cash flow” to drive down debt, and will offer a “fixed plus variable” dividend strategy—an industry first, by the way—that ensures regular quarterly returns with a bonus kick of 50% of the company’s remaining cash flow. What a novel idea.

 

Devon Energy

Devon Energy Corporation is a company engaged in hydrocarbon exploration in the United States. It is organized in Delaware and headquartered in the 50-story Devon Energy Center in Oklahoma City, Oklahoma. 

www.devonenergy.com

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Learn more about Reese Energy Consulting and our range of services and expertise at www.ReeseEnergyConsulting.com.

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Combustion Junction?

Combustion Junction?

Car, truck, and SUV dealerships throughout Calif., slapped their collective foreheads yesterday with news that will completely transform their new car sales floor in 15 years. Reese Energy Consulting is following the latest from Gov. Gavin Newsom, who has declared a phase out of the internal combustion system in his state and an all-out ban on the sale of new vehicles fueled by gasoline after 2035. The sale of used cars will get a pass. For now. You can practically hear Elon Musk’s wealth multiplying at warp speed. While Calif., is a known bellwether for low-emission rides, less than 8% of new car sales are electric. Surprisingly or not, the state is the second-largest market for EVs behind China yet continues to rank as the nation’s largest automobile market and, yep, consumer of gasoline. Comes now a collision of questions: What about infrastructure, the transition itself and all its many tentacles, realistic expectations from automakers with an even more amped timetable? As for enforcement of the new regulations, that’s still up in the air so to speak.

What do you think?

Learn more about REC and our range of upstream, midstream, and downstream services at www.ReeseEnergyConsulting.com.

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