UPDATE 1-Atlas Pipeline enters Eagle Ford shale with $1 bln buy
April 16 (Reuters) - Atlas Pipeline Partners LP said it would buy privately owned natural gas gathering and processing company TEAK Midstream LLC for $1 billion in cash to expand into the Eagle Ford shale field in South Texas.
Pipeline operators have been expanding presence in Bakken in North Dakota and Eagle Ford shale fields as production from these regions has increased substantially in the past few years.
Atlas Pipeline said in December it would buy Cardinal Midstream LLC, a privately held natural gas gathering and processing company present in Woodford shale field in Oklahoma.
The assets acquired by Atlas in Eagle Ford include a 200 million cubic feet per day (mmcfd) cryogenic processing plant and a gas header pipeline with 750 mmcfd of throughput capacity, Atlas Pipeline said on Tuesday.
The company said it would also acquire a 50 percent to 75 percent stake in joint venture agreements between TEAK and TexStar Midstream Services LP.
Atlas said it would finance the deal through a $400 million issuance of its preferred units and committed bank financing from Citigroup and Wells Fargo.
Atlas Energy, a master limited partnership and the parent of Atlas Pipeline, will invest $20 million in newly issued Atlas Pipeline's preferred units as part of the financing.
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