Crestwood Equity Partners LP (NYSE:CEQP) entered into a definitive merger agreement to acquire Oasis Midstream Partners LP (NasdaqGS:OMP) from Oasis Petroleum Inc. (NasdaqGS:OAS), OMS Holdings LLC and others for $1.2 billion on October 25, 2021. Under the terms of the agreement, Oasis Petroleum will receive $150 million in cash plus an aggregate of 21 million common units in exchange for its 33.8 million common units held in Oasis Midstream. Oasis Midstream public unitholders will receive an aggregate of 12.9 million Crestwood common units in exchange for the 14.8 million Oasis Midstream common units outstanding. This represents a total transaction value of approximately $1.8 billion, including the assumption of Oasis Midstream's outstanding debt of approximately $660 million as of September 30, 2021. In addition, Oasis Petroleum will receive a $10 million cash payment for its ownership of the General Partner interest of Oasis Midstream. Upon closing, Oasis Midstream former unitholders will own approximately 35% of Crestwood's outstanding common units, of which, approximately 21.7% will be owned by Oasis Petroleum. In connection with the transaction, Oasis Petroleum will receive the right to appoint two representatives to Crestwood's Board of Directors, subject to on-going ownership thresholds. Danny Brown and his team are going to become our largest producer customer and a major unitholder of Crestwood. The Merger Agreement further provides that, upon termination of the Merger Agreement under certain circumstances, OMP may be required to pay the Crestwood a termination fee of $40,000,000. The Director Nomination Agreement will grant Oasis Petroleum certain designation rights pursuant to which Oasis Petroleum may cause the board of directors of the Partnership GP to elect the designees selected by Oasis Petroleum. OMP General Partner surviving the Merger as a wholly owned subsidiary of the Crestwood. At the closing, Oasis Petroleum may designate two directors to the board of directors of the Partnership and for so long as it and its affiliates own 15% of the issued and outstanding Partnership Common Units. Crestwood is pleased to welcome John Jacobi and John Lancaster, Jr. to the Crestwood board, effective February 1, 2022.

The transaction is subject to Hart-Scott-Rodino regulatory approval. The completion of the Mergers is subject to the satisfaction or waiver of customary closing conditions, including, among others as adoption of the merger agreement by holders of a majority of the outstanding OMP Common Units, voting as a single class, effectiveness of registration statement of the Partnership on Form S-4. This transaction has been unanimously approved by the Boards of Directors of both general partners of Crestwood and Oasis Midstream. The transaction has been approved by both general partners of the Partnership and OMP. As of January 28, 2022, TortoiseEcofin announced that Oasis Midstream Partners will be removed from the Tortoise MLP Index® (TMLP), the Tortoise North American Pipeline IndexSM (TNAP), and the Tortoise Decarbonization Infrastructure Index (DCRBN) as a result of the merger. As of January 31, 2022, the transaction has been approved by holders of a majority of the common units representing limited partner interests in Oasis Midstream Partners.

The transaction is expected to close in the first quarter 2022. As of January 31, 2022, the mergers are expected to be completed on February 1, 2022. The transaction is expected to be accretive to Crestwood's distributable cash flow per unit in 2022. J.P. Morgan Securities served as lead financial advisor, Intrepid Partners, LLC served as financial advisor, and Joshua Davidson, Jonathan Bobinger, Michael Bresson, Luke Weedon, Scott Looper, Gail Stewart and Krisa Benskin of Baker Botts L.L.P. served as legal advisor to Crestwood. Morgan Stanley & Co. LLC and Tudor, Pickering, Holt & Co. served as financial advisors to Oasis Petroleum and its affiliates and David P. Oelman, Benji Barron, Ryan Carney, Debra Duncan, David D'Alessandro, Dario Mendoza, Sean Becker, Matt Dobbins and Suzanne Clevenger of Vinson & Elkins L.L.P. served as legal advisor to Oasis Petroleum and its affiliates. Jefferies LLC served as financial advisor and provided fairness opinion, and Richards, Layton & Finger, P.A. served as legal advisor to the Conflicts Committee of Oasis Midstream. Robert Halpin and the finance team have done a great job, and Will Moore and the corp. dev team in negotiating this.

Crestwood Equity Partners LP (NYSE:CEQP) completed the acquisition of Oasis Midstream Partners LP (NasdaqGS:OMP) from Oasis Petroleum Inc. (NasdaqGS:OAS), OMS Holdings LLC and others on February 1, 2022.