Quantum Energy Is Weighing Sale of Intensity Midstream

(Bloomberg) -- Quantum Energy Partners, an energy-focused private equity firm, is preparing to sell natural gas pipeline operator Intensity Midstream, which could fetch about $1.5 billion, according to people with knowledge of the matter.

Quantum is working with Jefferies Financial Group Inc. on an auction process for the Tulsa, Oklahoma-based company, said the people, who asked not to be identified because they weren’t authorized to speak publicly. Intensity is attracting interest from other private equity and infrastructure firms, they said.

A representative for Jefferies declined to comment. Representatives for Quantum and Intensity didn’t respond to requests for comment.

Intensity’s primary asset is Woodford Express, which gathers and processes natural gas for Gulfport Energy Corp. and other energy explorers in a rapidly developing shale basin in Oklahoma known as the Scoop, according to Intensity’s website and company filings.

Woodford Express, which began operating in 2015, projected that it would generate $50 million in earnings before interest, taxes, depreciation and amortization in 2018, Moody’s Investors Service said in a research note in January.

Quantum helped build Woodford Express through another company it had owned called Xplorer Midstream LLC, which the firm merged with Intensity in 2016, according to a press release.

Quantum had started Intensity a year earlier, committing to invest more than $300 million along with its co-founders to acquire pipeline assets in North America.

Intensity Chief Executive Officer Joe Griffin and Chief Financial Officer Derek Gipson were previously executives with Hiland Partners, which Kinder Morgan Inc. bought for $3 billion in 2015 from oilman Harold Hamm.

Quantum, based in Houston, raised $5.6 billion for its latest buyout fund, which closed this year, the firm announced in August.

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