EnLink Midstream Partners LP plans to pay about $600 million in cash and partnership units for Permian Basin gas gatherer and processor Coronado Midstream Holdings LLC, continuing an acquisition spree backed by a “…financial position which allows us to effectively expand in times like these,” EnLink CEO Barry Davis said Monday.

Coronado operates three cryogenic processing plants and a gas gathering system in the North Midland Basin, including about 270 miles of gathering pipelines, 175 MMcf/d of processing capacity and 35,000 hp of compression. An additional 100 MMcf/d of processing capacity and gathering system expansions of the Coronado system are under construction. Coronado’s key assets have been built within the past five years. The system has inlet volumes of 100 MMcf/d. EnLink plans to connect the Coronado system with its Bearkat system to create a multi-county rich gas gathering and processing system.

The Coronado system is underpinned by long-term contracts, which include the dedication of production from more than 190,000 acres. Producer customers include Reliance Energy Inc., Diamondback Energy Inc. and RSP Permian Inc. Reliance is the largest owner of Coronado, with affiliates of both Diamondback and RSP Permian owning the remainder. The sellers are to receive $240 million in cash, $180 million of EnLink Midstream Partners common units and $180 million of a new class of partnership common units, subject to adjustments.

“The Coronado assets are located in the core of the North Midland Basin and are supported by the region’s most focused and active producers,” Davis said. “By combining Coronado with our recent LPC [Crude Oil Marketing LLC] acquisition [see Shale Daily, Jan. 13] and our existing footprint, we have the opportunity to create tremendous value for our producer customers by linking our gas gathering, processing and crude oil logistics operations to provide a full-service midstream solution.

“In just over four months, we have announced approximately $1 billion of acquisitions, which is consistent with our growth strategy to expand our platform in key producing areas.”

Economics in the North Midland Basin are among the most favorable of all oil-producing regions in the United States, according to EnLink. Producers are targeting the Lower Spraberry, Wolfcamp B, and Wolfcamp D zones, among other prospective intervals, with horizontal drilling. “Recent well results from Coronado’s producer customers, as well as other producers, indicate outstanding resource potential in the area,” EnLink said.

“We have assembled a strong acreage position in the North Midland Basin that will continue to serve as a key driver of production growth for many years,” said Diamondback and Viper Energy Partners CEO Travis D. Stice. “We are excited about the development potential for multiple horizontal targets within the area that has and will continue to serve the Coronado system in the future.”

Midland, TX-based Diamondback recently drew praise from financial analysts who follow the company for being a ‘top pick’ in a weak commodity price environment (see Shale Daily, Jan. 14).

Coronado Midstream, formerly known as MidMar Gas, was established in September 2008 as a gathering system, constructed by Patriot Resources and Feagan Gathering Co. Construction on the first gathering projects began in December 2008. Last October Coronado said it had contracted with UOP Russell for the engineering and construction of a 200 MMcf/d cryogenic gas processing plant, called Riptide and to be located in central Martin County, TX. Initial capacity was slated for 100 MMcf/d with expansion to 200 MMcf/d later.

Besides the Permian, Dallas-based EnLink has assets in the Barnett Shale, Cana-Woodford Shale, Arkoma-Woodford Shale, Eagle Ford Shale, Haynesville Shale, Gulf Coast region, Utica Shale and Marcellus Shale. EnLink was formed through the combination of Crosstex Energy and substantially all of the U.S. midstream assets of Devon Energy Corp. (see Shale Daily, March 10, 2014).