In the largest energy IPO of 2019, Midland-based Rattler Midstream not only raised $665 million but also became the only pure-play midstream operator in the Permian. More accurately, the only pure-play midstream operator in the Permian with a single customer at the time—its E&P parent, Diamondback Energy.

Rattler Midstream

Rattler Midstream LP is a growth-oriented Delaware limited partnership formed in July 2018 by Diamondback to own, operate, develop and acquire midstream infrastructure assets in the Midland and Delaware Basins of the Permian Basin.

Like all good parents, Diamondback provided a solid foundation for its fledgling subsidiary, including 528 miles of crude, natural gas and water pipelines across the Midland and Delaware, and options to buy equity interests in the EPIC and Gray Oak pipelines, which extend from the Permian to points along the Gulf Coast. On a growth spurt, Rattler last October announced a joint acquisition with Oryx Midstream to purchase Reliance Gathering for $335 million in cash. With it came added customers in the Permian, greatly pleasing Diamondback and its shareholder family.

Less than a year after that dazzling IPO, Rattler Midstream is once again showing its wings with a new joint venture to build a $100 million, 60 MMCFD gas processing plant in Martin County, Texas, including incremental gas gathering and regional transportation pipelines. The new entity, known as Amarillo Rattler, owns the Yellow Rose gas gathering and processing system with 40 MMCFD capacity and more than 84 miles of gathering and transportation pipelines in Martin, Dawson and Andrews counties. The new plant is scheduled for commercial operation by mid-2021—and wouldn’t you know it?—Diamondback already has contracted for a portion of capacity.

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