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Key deal takeaways for Targa Resources and ETF investors
With the acquisition of Atlas Pipeline Partners, Targa Resources Corp (TRGP) will become a $23 billion enterprise with strong growth opportunities in some of the most active shale basins in the U.S.
With this acquisition, Targa Resources gets access to active basins such as Mississippi Lime, Woodford and SCOOP, while enhancing its existing Permian position.
The deal with Atlas Pipeline Partners (APL) strengthens Targa Resources Partners’ (NGLS) position In the Permian Basin. The move also broadens the company’s reach in the Eagle Ford and Bakken Shale formations.
The company provides natural gas gathering and processing services in the Eagle Ford Shale play in Texas, as well as in the Anadarko, Arkoma, and Permian basins.
After spinning off its non-midstream assets, ATLS’ assets will include its general partner and incentive distribution rights in APL, as well as 5.8 million APL units.
APL unit-holders will receive 0.5846 NGLS units plus a one-time cash payment of $1.26 for every APL unit. The total consideration comes to $38.66 per APL unit, which is a 15% premium on APL’s closing price as of October 10, 2014.
Both the companies are MLPs, or master limited partnerships, and subsidiaries of Targa Resources Corp (TRGP) and Atlas Energy LP (ATLS). The latter are also the respective general partners. In other words, this is a deal that involves one MLP acquiring another MLP.
The combined company will create a midstream enterprise with more than 22,500 miles of crude oil and natural gas pipelines across the U.S. The $7.7 billion deal is expected to close in the first quarter of 2015.
So, by the time any other facilities come online, Cheniere’s facilities will already be in place. And, Cheniere is likely to enjoy its front-of-the-line advantage for a little while longer.
In this part of the series, we’ll discuss Oiltanking Partners’ (OILT) and Enterprise Products Partners’ (EPD) current financial situation and why it makes strong sense to invest in OILT.
But you should keep in mind that EPD is a much larger company. So, it has much more capacity to invest in growth projects. OILT unitholders will benefit from EPD’s stronger base to spend on capex.
Pursuant to the successful completion of phase II of the merger, Enterprise Products Partners (EPD) will acquire Oiltanking Partners’ (OILT) 100% ownership.
According to EPD, it will save ~$30 million from various synergistic operations and cost savings from the complete integration of OILT’s business into Enterprise’s system.
With access to Oiltanking Partners’ (OILT) waterborne markets and storage position, EPD will be able to integrate its supply chain more efficiently.
OILT’s Houston facility includes a Houston terminal and Appelt terminal. The Houston facility has an aggregate active storage capacity of approximately 16.2 million barrels.
On October 1, Enterprise Products Partners (EPD) also proposed to merge Oiltanking Partners into EPD in a unit-for-unit exchange transaction.Phase 2
Through the acquisition, Enterprise Products Partners (EPD) received 100% of the general partner and related incentive distribution rights and a 66% limited partner or LP ownership in Oiltanking Partners (OILT).
Enterprise Products Partners’ (EPD) acquisition of Oiltanking Partners (OILT) involves two steps. In this part of the series, we will explain the first step.
EPCO, or Enterprise Products Company, is the general partner of Enterprise Products Partners (EPD). It also owns 35.3% of EPD’s limited partner interests
On October 1, 2014, Enterprise Products Partners (EPD) announced its acquisition of Oiltanking Partners L.P. (OILT), a midstream energy master limited partnership