Azure Midstream Files for IPO — Another MLP

The offering only has two underwriters: Citigroup and Bank of America Merrill Lynch.

Azure is a Delaware limited partnership focused on owning, operating, developing and acquiring midstream energy infrastructure that is strategically located in core producing areas of unconventional resource basins in North America. The company currently provides natural gas gathering, compression, treating and processing services in North Louisiana and East Texas in the prolific Haynesville and Bossier shale formations, the liquids-rich Cotton Valley formation and the shallower producing sands in the Travis Peak formation. According to the U.S. Energy Information Administration, these formations comprise the third largest natural gas basin in the United States in terms of natural gas production.

At the consummation of this offering, the assets will consist of a 40% limited partner interest, as well as the general partner interest, in Azure Midstream Operating. At the end of September, Azure Midstream Operating’s gathering systems included approximately 1,365 miles of pipeline, which gathered an average of approximately 991 MMcf/d of natural gas during the nine months that ended in September. At the same time, Azure generated over 90% of its revenues under long-term, fixed-fee and fixed-spread natural gas gathering and sales agreements that are intended to mitigate the direct commodity price exposure and enhance the stability of cash flows.

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Customers include some of the largest natural gas producers in North America, such as Bunge, EXCO, BP, Chesapeake Energy, Devon Energy, Encana, EOG Resources and EP Energy.

Substantially all gas gathering revenue is underpinned by minimum volume commitments, minimum revenue commitments or acreage dedications, including life of lease arrangements. The contracted revenue under minimum volume and revenue commitments on the Azure’s systems represented approximately 56.9% of revenue for the nine months that ended in September.

FULL IPO FILING