Morgan Stanley Energy Partners Completes Sale of Durango Permian to Kinetik Holdings

NEW YORK--(BUSINESS WIRE)--Investment funds managed by Morgan Stanley Energy Partners, announced today the closing of the sale of Durango Permian LLC (“Durango Permian” or the “Company”) to a subsidiary of Kinetik Holdings Inc. (“Kinetik”; NYSE: KNTK). Consideration for the Durango Permian sale includes a combination of cash and equity, including contingent consideration payable upon the successful commissioning of Durango Permian’s Kings Landing Gas Gathering and Processing Development (“Kings Landing”). Durango Permian, a subsidiary of Durango Midstream LLC (“Durango”), is a leading gas gathering, processing, and carbon dioxide (“CO2”) sequestration business operating in the Permian Basin of southeast New Mexico. Durango is majority-owned by funds managed by Morgan Stanley Energy Partners.

Commenting on the transaction, Richard Cargile, President and Chief Executive Officer of Durango, said: “Durango is excited to announce the completion of the sale of its Permian Basin assets to Kinetik. I am very proud of the dedication and tireless efforts of our employees as we have expanded our presence in New Mexico through two acquisitions and multiple growth projects in partnership with Morgan Stanley Energy Partners over the last five years. We share in Kinetik’s enthusiasm for the sustained growth potential of Durango’s operating region and for the Kings Landing project, which will provide a critical gas processing and treatment solution for the region’s producers. The Company’s assets are complementary to Kinetik’s existing operating footprint, expand Kinetik’s presence in New Mexico, and reinforce Kinetik’s value proposition as a pure-play midstream provider across the entire Delaware Basin. The combination of assets is expected to realize significant operating synergies and capture economies of scale benefits. The base business provides strong stable earnings and the commissioning of Kings Landing supports significant future growth in the area.”

John Moon, Managing Director and Head of Morgan Stanley Energy Partners, added: “Durango Permian was established with the vision of creating a best-in-class gas gathering and processing platform serving leading producers in the Permian Basin. Under the leadership of Rick Cargile and his team, we believe the Company has executed exceptionally well, and they have transformed the business into a leading independent midstream platform in the northern Delaware Basin. In this next chapter for Durango, we are excited to be partnered with Kinetik, which we believe is very well-positioned to capitalize on the substantial growth opportunities in New Mexico.”

Greenhill & Co., an affiliate of Mizuho, served as lead financial advisor to Durango Midstream. Wells Fargo Securities also served as financial advisor and lead technical advisor to Durango Midstream. Sidley Austin LLP served as legal counsel to Durango Midstream and Morgan Stanley Energy Partners.

About Morgan Stanley Energy Partners

Morgan Stanley Energy Partners, the energy-focused private equity business of Morgan Stanley Investment Management, is a leading energy private equity platform that makes privately negotiated equity and equity-related investments in energy companies located primarily in North America. Morgan Stanley Energy Partners pursues a differentiated investment strategy, focused on the buyout and build-up of strategically attractive, established energy businesses across the energy value chain in partnership with world-class management teams. For further information about Morgan Stanley Energy Partners, please visit www.morganstanley.com/im/energypartners.

About Durango Midstream

Headquartered in The Woodlands, Texas, Durango is a premier midstream gas gathering, processing, and CO2 sequestration business with assets strategically located in the Permian Basin and Midcontinent regions of the United States. The Company is led by Richard Cargile and is majority-owned by funds managed by Morgan Stanley Energy Partners. For further information about Durango, please visit www.durangomidstream.com