First Reserve Announces Agreement To Acquire Dominion Energy's 50% Interest In Blue Racer Midstream, LLC

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Nov 01, 2018, 08:00 ET

STAMFORD, Conn., HOUSTON, DALLAS and LONDON, Nov. 1, 2018 /PRNewswire/ -- First Reserve, a leading global private equity investment firm exclusively focused on energy, today announced an agreement to purchase Dominion Energy's (NYSE: D) 50% interest in Blue Racer Midstream, LLC ("Blue Racer" or "the Company), funded in part by equity from First Reserve Fund XIII and investment funds affiliated with First Reserve. The transaction is expected to close prior to year-end 2018, subject to regulatory approvals.

Blue Racer is a joint venture formed in December 2012 by Dominion and Caiman Energy II, LLC ("Caiman II") to own, operate, develop and acquire midstream assets in the Utica Shale and certain adjacent areas in the Marcellus Shale. Blue Racer provides natural gas gathering, compression, dehydrating, treating, processing, fractionation, and transportation services, forming an interconnected midstream business.

With more than 700 miles of gathering pipeline and 800 million cubic feet per day of cryogenic processing capacity, Blue Racer's business is underpinned by a high degree of operational reliability and significant contractual commitments from its customers. These commitments are comprised of multi-year contracts that include various types of commercial arrangements, including acreage dedications, well pad dedications, first flow commitments, minimum volume commitments, and demand payments. The Company believes its strategically located assets and contractual relationships with material customers will allow it to retain and grow its position as a leading midstream company serving customers in the Utica and Marcellus shale plays.

Gary Reaves, Managing Director at First Reserve, stated, "First Reserve has a deep history of investing behind some of North America's most significant midstream operators. In addition, we have a long history of investing in the Utica shale, most notably through our ownership of Ascent Resources which is currently the largest natural gas producer in the basin. This historical and current portfolio experience leads us to believe the Utica shale is one of the premier rich natural gas development areas in the U.S., and, in our view, Blue Racer is particularly well-positioned to capture this opportunity. We are excited to work with Blue Racer's existing owners and the Company's experienced management team to capitalize on a strong growth platform poised to create value for our investors."

Stephen L. Arata, Chief Executive Officer for Blue Racer, stated, "When we formed Blue Racer in 2012, Dominion contributed the initial gathering, processing and fractionation assets that allowed Blue Racer to establish a foothold in the region that we expanded into a growing business serving the leading producers in the Utica and Marcellus shale plays. Dominion is an outstanding company, and we are grateful for our successful six-year partnership. As we look forward, we are excited to welcome First Reserve as a partner that, along with Caiman II, will help us continue to drive growth and expand our regional footprint. First Reserve's deep understanding of the basin, financial strength, and network bring Blue Racer a partner that puts us in a strong position to advance our business plan into the coming decade."

Transaction terms were not disclosed.

About First Reserve

First Reserve is a leading global private equity investment firm exclusively focused on energy. With 35 years of industry insight, investment expertise and operational excellence, the Firm has cultivated an enduring network of global relationships and raised approximately USD $31 billion of aggregate capital since inception. First Reserve has completed over 650 transactions (including platform investments and add-on acquisitions), creating several notable energy companies throughout the Firm's history. Its portfolio companies have operated on six continents, spanning the energy spectrum from upstream oil and gas to midstream and downstream, including resources, equipment and services, and associated infrastructure. Please visit www.firstreserve.com for further information.

For First Reserve media inquiries, please contact:

Jonathan Keehner / Julie Oakes
Joele Frank, Wilkinson Brimmer Katcher
212.355.4449
Email: [email protected]

For Blue Racer media inquiries, please contact:

Casey Nikoloric
Managing Principal, TEN|10 Group
303.433.4397, x101 o, 303.507.0510 m
Email: [email protected]

SOURCE First Reserve