Energy Transfer Partners to Acquire Certain Interests in PennTex Midstream for $640 Million
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Energy Transfer Partners, L.P. has entered into a definitive agreement to acquire certain interests in PennTex Midstream Partners, LP from various parties for total consideration of approximately $640 million. Upon closing the transaction, Energy Transfer Partners will own 100 percent of the general partner of PennTex Midstream, together with all of its incentive distribution rights (IDRs), as well as 6.3 million common units and all 20 million subordinated units of PennTex Midstream, representing approximately 65 percent of the total limited partner interests in PennTex Midstream.
The acquisition consideration paid by Energy Transfer Partners will be 50 percent Energy Transfer Partners 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 Energy Transfer Partners’ at-the-market program and borrowings under its revolving credit facility. Additionally, in conjunction with the transaction, Energy Transfer Equity, L.P. has agreed to an IDR waiver in the amount of $33 million annually that will run in perpetuity.
PennTex Midstream 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 Energy Transfer Partners’ existing midstream footprint in the region and position Energy Transfer Partners for significant growth and value creation.
PennTex Midstream’s primary customer is Range Resources Corporation. In addition to long-term fee-based gathering and processing agreements that include minimum volume commitments, PennTex Midstream and Range Resources are parties to an agreement, which provides PennTex Midstream the exclusive right to build all of the midstream infrastructure for Range Resources within an area of mutual interest (AMI) in northern Louisiana and to provide midstream services to support Range Resources’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.
About Energy Transfer Partners
Energy Transfer Partners, L.P. 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 percent of the incentive distribution rights, and approximately 67.1 million common units in Sunoco Logistics Partners L.P., 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.
To stop by Energy Transfer Partners’ website, CLICK HERE
About PennTex Midstream
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.
To stop by PennTex Midstream’s website, CLICK HERE
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