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Midstream: Reserve Engineering & Geoscience: Greenfield Midstream: Technical Due Diligence/Acquisition

Greenfield Midstream (the Company) is an independent energy company focused on the development of midstream projects across North America. Based in Houston, Greenfield Midstream selectively evaluates acquisition opportunities, with an eye toward the strategic expansion of underutilized assets in both mature and emerging basins.

In late 2017, Ralph E. Davis Associates (RED) was engaged by Greenfield Midstream to perform technical due diligence for a midstream project in the Denver-Julesburg (DJ) Basin in Colorado. Upon completion of the work, Greenfield Midstream partnered with Noble Energy to form a joint venture, Black Diamond Gathering LLC, and made a successful bid for the Saddle Butte asset.

Deal highlights included:

  • $625 million total acquisition price (paid 50/50 by Noble Midstream Partners LP, or “NBLX”, and Greenfield)
  • NBLX received 4.4% promote in the joint venture and owns 54% of the Black Diamond joint venture
  • The deal closed on January 31, 2018 for an aggregate purchase price of $638.5 million

Saddle Butte overview:

  • DJ Basin crude gathering, oil storage and terminal blending assets
  • 160 miles of pipeline
  • 300,000 barrels per day (bbl/d) of delivery capacity
  • 210,000 bbl combined crude oil storage capacity from two terminal sites
  • 55,000 bbl/d of throughput capacity
  • 141,000 dedicated acres from six customers (96,000 from PDC Energy at closing) under fixed fee arrangements
  • Average of seven rigs running on the dedicated acreage in 2017
  • Will be operated by Noble Midstream upon closing

RED added value to the client by providing a high-level overview of the DJ Basin with future development trends and basin takeaway dynamics. The team developed an average type curve for recent completion technology of 7,500-ft. laterals around buffer area of interest. They provided an understanding to client of the high-level inventory of number of wells able to be drilled in this area along with how many wells could be drilled in each bench per section and spacing. A breakeven economic model for this basin was created to review commerciality. The team developed an isopach map of the area showing porosity and height. The geologic findings were incorporated into to the engineering analysis.

Established in 1924, RED is one of the most respected international independent petroleum engineering firms. RED performs petroleum engineering and geological studies, independently certifies reserve reports and prepares financial analyses and technical evaluations for use in litigation or regulatory hearings. For more information, click here

Steve Hendrickson

PresidentRalph E. Davis Associates