Energy Transfer Partners to Acquire Certain Interests in PennTex Midstream Partners
October 25 2016 - 7:00AM
Business Wire
Energy Transfer to own general partner,
incentive distribution rights, and approximately 65% of total
limited partner interests in PennTex
Complementary asset base of PennTex and
Energy Transfer positions ETP for significant growth and value
creation in northern Louisiana
Energy Transfer Partners, L.P. (NYSE: ETP) today
announced it has entered into a definitive agreement to acquire
certain interests in PennTex Midstream Partners, LP (NASDAQ: PTXP)
from various parties (“Sellers”) for total consideration of
approximately $640 million. Upon closing the transaction, ETP will
own 100% of the general partner of PTXP, together with all of its
incentive distribution rights (IDRs), as well as 6.3 million common
units and all 20 million subordinated units of PTXP, representing
approximately 65 percent of the total limited partner interests in
PTXP.
The acquisition consideration paid by ETP will be 50 percent ETP
common units issued directly to Sellers and 50 percent cash. The
cash portion of the purchase price will be funded with a
combination of proceeds from common units recently issued under
ETP’s At-The-Market program and borrowings under its revolving
credit facility. Additionally, in conjunction with the transaction,
Energy Transfer Equity, L.P. (NYSE: ETE) has agreed to an IDR
waiver in the amount of $33 million annually that will run in
perpetuity.
PTXP owns midstream assets strategically located in the
Terryville Complex in northern Louisiana that consist of a rich
natural gas gathering system, two cryogenic natural gas processing
plants totaling 400 million cubic feet per day of capacity, along
with residue gas and natural gas liquids (NGLs) pipelines. These
assets complement ETP’s existing midstream footprint in the region
and position ETP for significant growth and value creation.
PTXP’s primary customer is Range Resources Corporation (NYSE:
RRC). In addition to long-term fee-based gathering and processing
agreements that include minimum volume commitments, PTXP and RRC
are parties to an agreement, which provides PTXP the exclusive
right to build all of the midstream infrastructure for RRC within
an area of mutual interest (AMI) in northern Louisiana and to
provide midstream services to support RRC’s current and future
production on substantially all of its operated acreage within the
AMI.
The transaction is expected to close in the fourth quarter of
2016, subject to customary closing conditions.
Credit Suisse acted as the financial advisor to ETP for the
transaction. Andrews Kurth Kenyon LLP served as legal counsel to
ETP.
Energy Transfer Partners, L.P. (NYSE: ETP) is a master
limited partnership that owns and operates one of the largest and
most diversified portfolios of energy assets in the United States.
ETP’s subsidiaries include Panhandle Eastern Pipe Line Company, LP
(the successor of Southern Union Company) and Lone Star NGL LLC,
which owns and operates natural gas liquids storage, fractionation
and transportation assets. In total, ETP currently owns and
operates more than 62,500 miles of natural gas and natural gas
liquids pipelines. ETP also owns the general partner, 100% of the
incentive distribution rights, and approximately 67.1 million
common units in Sunoco Logistics Partners L.P. (NYSE: SXL), which
operates a geographically diverse portfolio of pipelines,
terminalling and acquisition and marketing assets. ETP’s general
partner is owned by Energy Transfer Equity, L.P. For more
information, visit the Energy Transfer Partners, L.P. website at
www.energytransfer.com.
PennTex Midstream Partners, LP is a growth-oriented
master limited partnership focused on owning, operating, acquiring
and developing midstream energy infrastructure assets in North
America. PTXP provides natural gas gathering and processing and
residue gas and natural gas liquids transportation services to
producers in the Terryville Complex in northern Louisiana. For more
information, visit www.penntex.com.
Forward-Looking Statements
This news release may include certain statements concerning
expectations for the future that are forward-looking statements as
defined by federal law. Such forward-looking statements are subject
to a variety of known and unknown risks, uncertainties, and other
factors that are difficult to predict and many of which are beyond
management’s control. An extensive list of factors that can affect
future results are discussed in the Partnership’s Annual Report on
Form 10-K and other documents filed from time to time with the
Securities and Exchange Commission. The Partnership undertakes no
obligation to update or revise any forward-looking statement to
reflect new information or events.
The information contained in this press release is available on
our website at www.energytransfer.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20161025005687/en/
Energy Transfer:Investor Relations:Brent Ratliff,
214-981-0795orLyndsay Hannah, 214-981-0795orMedia Relations:Vicki
Granado, 214-498-9272
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