TULSA, Okla., May 14, 2019 /PRNewswire/ -- NGL Energy
Partners LP (NYSE: NGL) ("NGL") announced it has executed a
definitive agreement to combine all of the assets of Mesquite
Disposals Unlimited, LLC ("Mesquite") with NGL's Water Solutions
business for approximately $890
million on a cash-free, debt-free basis. Mesquite SWD Inc.
will remain the operator of the Mesquite assets led by Mesquite's
current management team. The assets consist of a fully
interconnected produced water pipeline transportation and disposal
system in Eddy and Lea Counties, New
Mexico, and Loving County,
Texas. At closing the Mesquite system will have 35 salt water
disposal wells in total, representing over 1 million barrels per
day of disposal capacity expected by year-end 2019. The majority of
volumes on Mesquite's system are contracted under long-term acreage
dedications and minimum volume commitments. Additionally,
approximately 95% of the current system volumes are delivered via
pipeline. NGL expects the funding for this acquisition to be
leverage-neutral and significantly accretive to distributable cash
flow per unit in fiscal 2020 and beyond.
Pro Forma Northern Delaware Asset Map includes existing assets,
assets under construction, pipelines and pipeline rights of way
"As we have consistently stated in the past, our water strategy
is focused on consolidating, integrating and growing our position
in central Reeves County, north to
the Texas / New Mexico state line and throughout
Lea and Eddy County. Pro forma for the Mesquite
assets, NGL's permitted disposal capacity will nearly double to
over 2 million barrels per day in the Delaware Basin," stated Mike Krimbill, NGL's CEO. "This transaction
creates the redundancy required by our producers to manage produced
water by connecting a gathering system to multiple 24-inch
pipelines."
"The Mesquite acquisition makes NGL the largest water
transportation and disposal company in the Delaware Basin, providing multiple
transportation, disposal and recycling options to our E&P
customers," stated Doug White, NGL's
EVP Water Solutions. "The breadth and size of our system and
diversity of our product offerings allows NGL to provide customized
water solutions for all of our customers' needs. NGL remains
focused on delivering on its commitments to its customers through
its best-in-class execution."
"The Mesquite family is excited to work alongside NGL in this
partnership," said Clay Wilson, CEO
of Mesquite. "We are thrilled to continue operating these assets
and providing an enhanced suite of capabilities to our customers by
taking advantage of the incredible synergies with the NGL assets
and team."
NGL will issue $100 million of its
9.625% Class C Fixed-to-Floating Rate Cumulative Redeemable
Perpetual Preferred Units to owners of Mesquite, who also have an
option to receive six million common units at a price of
$16.00 per unit at closing.
Funding of the balance of the consideration is expected to be
leverage-neutral to the Partnership and not include the issuance of
any additional common equity.
The transaction remains subject to satisfaction of specified
closing conditions, including expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976. NGL expects this transaction to close in
July 2019.
Members of NGL's management team are attending the 2019 MLP
& Energy Infrastructure Conference from May 14 – 16, 2019 in Las Vegas, Nevada and will be discussing this
transaction with investors in a series of one-on-one meetings as
well as a presentation. NGL's slide presentation referenced
at the conference is available on NGL's website
at www.nglenergypartners.com on the "Presentations"
sub-tab under the "Investor Relations" section.
Barclays is acting as financial advisor to NGL. Winston
& Strawn LLP is acting as legal counsel to NGL.
Forward Looking Statements
Certain matters contained in this Press Release include
"forward-looking statements." All statements, other than statements
of historical fact, included in this Press Release may constitute
forward-looking statements. Although we believe that the
expectations reflected in these forward-looking statements are
reasonable, we cannot assure you that these expectations will prove
to be correct. These forward-looking statements are subject to
certain known and unknown risks and uncertainties, as well as
assumptions that could cause actual results to differ materially
from those reflected in these forward-looking statements. Factors
that might cause actual results to differ include, but are not
limited to, the risk factors discussed from time to time in each of
our documents and reports filed with the SEC.
Readers are cautioned not to place undue reliance on any
forward-looking statements contained in this Press Release, which
reflect management's opinions only as of the date hereof. Except as
required by law, we undertake no obligation to revise or publicly
release the results of any revision to any forward-looking
statements.
About NGL Energy Partners LP
NGL Energy Partners LP is
a Delaware limited partnership.
NGL owns and operates a vertically integrated energy business with
four primary businesses: Crude Oil Logistics, Water Solutions,
Liquids, and Refined Products and Renewables. NGL completed its
initial public offering in May 2011. For further information,
visit the Partnership's website at www.nglenergypartners.com.
NGL Energy Partners LP
Investor Relations:
Trey Karlovich, 918-481-1119
Chief Financial Officer and Executive Vice President
Trey.Karlovich@nglep.com
or
Linda Bridges, 918-481-1119
Senior Vice President - Finance and Treasurer
Linda.Bridges@nglep.com
Commercial:
Doug White, 720-213-1579
Executive Vice President – Water Solutions
Doug.White@nglep.com
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SOURCE NGL Energy Partners LP