© 2012 The Texas Lawbook.
By Natalie Posgate
Staff Writer for The Texas Lawbook
Sugar Land-based Rangeland Energy LLC, the owner and operator of the COLT energy distribution system in North Dakota, has entered an agreement to sell its company to Missouri-based Inergy Midstream, LP for $425 million.
The COLT system is the largest open-access crude oil distribution hub in North Dakota. Located in the heart of the Bakken and Three Forks shale oil producing region, the COLT system includes a large oil rail loading terminal in Williams County, N.D., and related storage and pipeline assets. The components of the COLT system include the COLT Hub, the COLT Connector and the Dry Fork Terminal.
Jones Day is advising Rangeland in the transaction, with Houston M&A and energy partner Jeff Schlegel leading the deal. Other Jones Day attorneys involved include Houston labor and employment partner Mark Temple, Dallas tax partner Todd Wallace and of counsel Gary Short, Houston associates Omar Samji and David Stringer, and Dallas associate Isaac Griesbaum.
Vinson & Elkins is advising Inergy in the transaction, with Houston M&A partner Doug McWilliams as the lead attorney.
Schlegel said that working on this transaction is especially near and dear to Jones Day because the firm has been involved with advising Rangeland since the company’s inception in 2009.
“We have been involved from the very beginning,” he said. “We helped set up Rangeland, were involved in all of their commercial and construction contracts, helped with their financing and ultimately their sale.”
Rangeland formed in 2009 to focus on developing, acquiring, owning and operating infrastructure for crude oil, natural gas and natural gas liquids, with a primary focus in North Dakota. It is backed by an equity commitment from San Antonio-based EnCap Flatrock Midstream. Rangeland started building the COLT Hub in 2011 and the terminal was placed in service in May of this year.
The COLT Hub acquisition is an expansion of Inergy Midstream’s shale-focused infrastructure portfolio and a natural extension of Inergy’s refinery and producer-services businesses. It has 720,000 barrels of crude oil storage and two 8,700-foot rail loops. With these features, the COLT Hub can accommodate 120 car unit trains and is capable of moving more than 120,000 barrels per day by rail.
“The COLT Hub is an attractive asset that provides refiners with crucial access to Bakken-sourced crude oil and offers producers reliable takeaway capacity to premium demand markets,” President Bill Gautreaux of Inergy Services said in a statement.
Rangeland employees working in North Dakota will be invited to join Inergy, but Rangeland’s management team in Sugar Land will stay together and retain the company’s name while continuing to pursue midstream development opportunities across North America with EnCap Flatrock.
The transaction is expected to close in early December.
© 2012 The Texas Lawbook. Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.