Oct 26 (Reuters) - Oil and gas pipeline company Crestwood Equity Partners LP agreed to buy Oasis Petroleum Inc's midstream unit in a $1.8 billion deal, as it looks to expand its footprint in U.S. shale basins.
The cash-and-stock deal comes as oil and gas prices have touched multi-year highs, boosting shareholders' confidence in the sector and encouraging mergers.
Last week, Altus Midstream Co announced a merge with BCP Raptor, a holding company for pipeline assets in the Permian Basin, with the combined entity to be valued at $9 billion, inclusive of debt.
Crestwood estimates it can capture over $20 million in incremental annual cash flow over the next several years from the Oasis deal and identified about $25 million in annual cost savings shortly after the transaction closes in 2022.
Crestwood also said on Tuesday it expects to increase its distribution to $2.62 per unit annually, an about 5% increase year-over-year, after the deal closes.
Oasis Petroleum will receive $150 million in cash and an aggregate of 21 million units in exchange for 33.8 million units held in its midstream company. It will also receive a $10 million cash payment for its ownership of the General Partner interest of Oasis Midstream.
Shareholders of Oasis Midstream, which had an outstanding debt of about $660 million as of Sept. 30, will receive an aggregate of 12.9 million Crestwood units in exchange for 14.8 million shares held.
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