EagleClaw Midstream to buy rival Caprock for about $950 million

(Reuters) - Blackstone-backed pipeline company EagleClaw Midstream Ventures LLC said  it would buy rival Caprock Midstream Holdings for about $950 million, strengthening its presence in the oil-rich Permian Basin.

A surge in oil and gas production in the Permian basin of west Texas and New Mexico has outstripped transport capacity and has encouraged midstream companies to invest in the region.

EagleClaw, which said it is the largest privately held midstream operator in the Permian’s Delaware Basin in west Texas, will buy Caprock from Dallas-based private equity firm Energy Spectrum Capital and Caprock Midstream Management.

Caprock will be renamed EagleClaw Midstream II and will operate as a sister entity to EagleClaw after the deal closes, expected in 2018.

Jefferies LLC is the financial adviser to Blackstone and EagleClaw, while Evercore and Barclays advised Caprock and Energy Spectrum.

EagleClaw Midstream is a portfolio company of Blackstone Energy Partners, Blackstone’s energy-focused private equity business.

Reporting by Karan Nagarkatti in Bengaluru; Editing by Sriraj Kalluvila

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