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With EnCap Backing, Cardinal Midstream Growing Utica Footprint, Expanding in North America

Dallas-based Cardinal Midstream has received a $250 million equity commitment from EnCap Flatrock Midstream to build out a Utica Shale dry gas gathering system in north central Pennsylvania and acquiring other assets across North America. 

Management said Cardinal Midstream III LLC would pursue midstream acquisitions and development opportunities in both conventional and unconventional oil and natural gas plays. Cardinal currently owns and operates a high pressure system serving Utica gas production in Tioga County, PA, long been a hotbed for Marcellus Shale drilling that has seen renewed interest in recent years as the deeper Utica is developed.

Led by CEO Doug Dormer, the company's executives have been involved in acquiring, developing and operating more than $1.3 billion in midstream assets since Cardinal was founded in 2008. At one time, the company was one of the largest gas processors in Oklahoma's Arkoma Woodford Shale before selling the assets in 2012.

Earlier this year, Cardinal Midstream sold its interest in Cardinal PA Holdings LLC to a subsidiary of Energy Transfer Partners LP. Cardinal PA provides midstream services in the Marcellus in southwestern Pennsylvania. 

Last week's announcement marked the third partnership between EnCap and Cardinal. The company provided few details in its announcement, but Dormer said the equity would likely be put toward growing the midstream footprint in Tioga County and entering other basins across the country.

EnCap was also formed in 2008 by a partnership between energy-focused private equity firms EnCap Investments LP and Flatrock Energy Advisors. The firm manages investment commitments of nearly $6 billion. More recently, it sold Midland, TX-based EagleClaw Midstream Ventures LLC for $2 billion and committed $200 million to help form Aspen Midstream LLC.

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