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Capital Infusions Bolster Camelback Start-up, Improve NuStar Liquidity
A $400 million capital commitment for Camelback Midstream Holdings, and a separate $750 million loan for NuStar Energy LP should help the Lower 48 operators improve their bottom lines.
Scottsdale, AZ-based Camelback, which acquires and develops midstream infrastructure, secured funds from its management team and ArcLight Capital Partners LLC.
The management team, led by CEO Brent McCune, previously worked at Western Refining, which continued when Andeavor Logistics LP took the company over in a merger.
“We look forward to building Camelback Midstream with a focus on targeted regions where we see opportunity and have strong relationships and a history of success,” McCune said. “We work closely with our customers to develop creative, practical solutions that meet their logistical and marketing needs.”
ArcLight founder Dan Revers said the partnership was important, “particularly in today’s market…We look forward to supporting the Camelback Midstream team as they pursue opportunities in what we believe will be a compelling acquisition environment for well-capitalized midstream companies.”
Meanwhile, publicly traded master limited partnership NuStar, which has infrastructure in the Permian Basin and Eagle Ford Shale among others, has entered into a $750 million unsecured term loan agreement with funds managed by Oaktree Capital Management LP to strengthen its near-term liquidity.
The three-year facility allows the liquids terminal operator to draw $500 million at closing and another $250 million under the facility during the first year.
The backstop “provides important financial flexibility to address current market challenges,” CEO Brad Barron said. The proceeds are being used to pay down the revolver and address near-term debt maturities.
NuStar also has improved its liquidity by sharply cutting 2020 spending, Barron said, with plans to spend $165-195 million, down by around 60% year/year. Another $20-30 million of expense reductions also are being considered.
“We have also identified a significant amount of additional potential reductions that we are prepared to make to scale back spending in 2021, as conditions warrant,” Barron said.
The San Antonio, TX-based operator today has about 10,000 miles of pipeline and 74 terminal and storage facilities that store and distribute crude, refined products and specialty liquids.
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