World News: 12:30 GMT Monday 14th January 2019. [Craig W. Thomas, Concerned Shareholder of American Midstream Partners, LP via Globe Newswire via SPi World News]
HOUSTON, Jan. 14, 2019 (GLOBE NEWSWIRE) -- Craig W. Thomas, a concerned unitholder of American Midstream Partners, LP (“AMID”), encourages the independent directors of AMID (Mr. Peter A. Fassulo, Mr. Donald R. Kendall Jr., and Mr. Gerald A. Tywoniuk) to explore possible claims for the breach in any representations and warranties made by ArcLight Capital Partners, LLC and its affiliates (“ArcLight”) in ArcLight’s sale of its 15.5% stake to AMID in Delta House in September 2017 and JP Energy Partners, LP in March of 2017.
ArcLight sold a 15.5% stake in Delta House to AMID for $125.4 million that within days or weeks of the September 29, 2017 closing saw volumes plummet from 120,000 barrels per day to 60,000 barrels per day on average (page 10 of AMID’s presentation at the Bank of America Merrill Lynch Leveraged Finance Conference (“BOFA Conference”) in December 2018). ArcLight subsequently signed a “Capital Contribution Agreement” in March 2018 to cover the shortfalls from Delta House AMID indicated that the volume shortfall was the result of third-party upstream infrastructure that required remediation. Given this odd fact pattern, , including the JP Energy Partners, LP deal, as the independents should have legal and financial advisors at their disposal.
In addition, Mr. Thomas points the independent directors’ attention to British Petroleum’s (“BP”) January 8, 2019 press release entitled, “BP plans for significant growth in deepwater Gulf of Mexico”. In the press release, BP stated, “Recent BP breakthrough in seismic imaging identifies 1 billion barrels of additional oil in place at Thunder Horse field.” According to AMID’s presentation at the BOFA Conference (page 9), Thunder Horse currently accounts for approximately 175,000 Mcf/day in gathered volumes which likely makes the field the most prolific play in AMID’s offshore assets.
Mr. Thomas believes that if BP’s new discovery is in AMID’s Delta House or Okeanos catchment area, then the value of AMID’s offshore assets has risen as the useful life of the assets has been extended by BP’s discovery. .
Mr. Thomas encourages the independent directors to use pro-forma EBITDA for Delta House assuming 135,000 barrels per day in throughput in any assessment of value. On its Q3 2018 earnings call, AMID indicated that Delta House volumes could achieve nameplate capacity of 135,000 barrels per day (versus 120,000 barrels assumed in the BOFA Conference presentation). .
Mr. Thomas concluded, “I see value of at least $9.00 per share assuming $180 million in 2019 EBITDA that includes higher Delta House EBITDA, higher value for Delta House due to BP’s discovery, the harvesting of additional EBITDA from the $85 million in growth capital expenditures completed in 2018, and the option in the 25% stake in Enterprise’s Pascagoula gas plant. .”
Contact: Craig W. Thomas, firstname.lastname@example.org
Globe Newswire: 12:30 GMT Monday 14th January 2019
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