Pipeline Operator Nuevo Midstream Said to Explore Sale

Nuevo Midstream LLC, a Texas pipeline company backed by private-equity firm EnCap FlatRock Midstream, is seeking a buyer and could fetch $1.5 billion, according to people familiar with the matter.

Nuevo, which is working with Barclays Plc on the sale, has drawn interest from potential buyers including Oneok Inc. and Regency Energy Partners LP, said the people, who asked not to be identified because the matter is not public. The Houston-based company could reach a deal in the next few weeks, the people said.

Takeovers involving companies that help transport, store and process oil and natural gas after have surged this year, as buyers including Enterprise Products Partners LP and Energy Transfer Partners LP bulk up to handle increased U.S. energy production. Over $100 billion in such deals have been announced so far in 2014, more than three times the figure for last year, data compiled by Bloomberg show.

In August, gas-pipeline giant Kinder Morgan Inc. agreed to buy three of its operating units for $44 billion, in the year’s largest energy deal.

Marc Hazelton, spokesman for Barclays, declined to comment, as did Casey Nikoloric, a spokeswoman for EnCap Flatrock and Nuevo. Representatives for Regency and Oneok didn’t return calls for comment.

Nuevo, formed in 2011, offers gathering, compression, processing, and treating services to oil and gas producers in the Permian Basin in Texas and New Mexico, according to its website. EnCap Flatrock, an affiliate of buyout firm EnCap Investments LP, primarily invests in pipeline companies.

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