UPDATE 1-Targa Resources Partners to buy Bakken pipeline for $950 mln
Nov 15 (Reuters) - Targa Resources Partners LP said it will buy the Williston Basin crude oil pipeline and terminal system in North Dakota from Saddle Butte Pipeline LLC for $950 million.
The pipeline system is located in the oil-rich Bakken Shale field in the McKenzie, Dunn and Mountrail counties and has about 155 miles of crude oil pipelines.
Home to the Bakken formation, North Dakota has surpassed Alaska to became the second-largest oil producer in the United States behind Texas.
Output in the Bakken - which spans North Dakota, Montana and Canada - is expected to double to about 1.2 million barrels per day by 2015. Output from the region was only 6,000 barrels per day six years ago, according to data from the state of North Dakota.
The Williston Basin assets have a combined crude oil operational storage capacity of 70,000 barrels, Targa Resources said in a statement.
The company plans to fund the deal and associated capital expenditures with about 50 percent debt and 50 percent equity.
Targa Resources expects the deal to contribute an additional 10 percent to 15 percent to its current 2013 outlook for earnings before interest taxes depreciation and amortization (EBITDA). It expects the deal to add to distributable cash flow per unit from 2014.
Separately, the company said it commenced a public offering of 9.5 million common units, and could use the proceeds to fund the deal or repay debt.
Targa Resource Partners owns midstream assets along the Louisiana Gulf Coast, the Permian Basin in West Texas and Southeast New Mexico, and the Fort Worth Basin in North Texas.
The company is managed by its general partner, Targa Resources GP LLC, which is owned by Targa Resources Corp .
Evercore Partners advised Targa Resources on the deal.
- Scots spurn independence in historic vote but demand new powers |
- Eight bodies found after attack on Guinea Ebola education team
- Alibaba IPO prices at top of range, raising $21.8 billion |
- Yamal, Russia's gas megaplan, becomes symbol of sanctions defiance
- Relief for Europe as Scotland stays in United Kingdom