Nov 15 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
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
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.