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Lucid Energy Buys Delaware Basin Gatherer, Processor Agave Energy

Dallas-based midstream provider Lucid Energy Group II LLC has acquired Agave Energy Co., which owns and operates natural gas gathering and processing assets in the Delaware Basin of southeastern New Mexico and the Powder River Basin of eastern Wyoming.

Agave's assets are located primarily in Eddy and Lea counties in New Mexico and include 280 MMcf/d processing capacity, more than 1,300 miles of gas gathering pipeline and more than 60,000 hp of compression. "This transaction firmly establishes Lucid’s franchise position in the Delaware Basin," said Mike Latchem, CEO of Lucid I and Lucid II.

Lucid II plans to expand Agave's pipeline footprint in the Delaware Basin, including a new 200 MMcf/d cryogenic processing plant at Agave's Red Hills complex in Lea County. Construction of the plant has begun, with commissioning expected in mid-2017.

Lucid II was formed last December. Previously formed Lucid I operates a large gathering and processing footprint in the Midland Basin, serving more than 30 customers across nine counties in West Texas. The combined Lucid companies are the largest privately held natural gas processor working in the Permian Basin, with 660 MMcf/d of natural gas processing capacity and more than 3,300 miles of pipeline in operation.

Lucid I and Lucid II are supported by equity capital commitments of more than $850 million from EnCap Flatrock Midstream.

The Delaware Basin has seen significant midstream activity in recent months as producers have been flocking to the region (see Shale DailyAug. 19;May 5).

For insights on the Permian Basin shared by the producers most active in the play, check out NGI’s latest special report, Permian Basin: ‘The Mother Lode.’

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