PVR Partners LP
Overview: Regency’s growth projects in 2014
For the full year of 2014, Regency announced growth capex expenditures of $1.2 billion.
Overview: Regency’s recent acquisitions
On March 21, Regency closed its acquisition with PVR Partners. The combination creates a fully integrated midstream partnership platform by further expanding Regency’s position in the Appalachia Basin.
Overview: Regency Energy Partners
Regency Energy Partners L.P. (RGP) is a midstream operator of natural gas pipelines, gathering systems, and processing facilities.
Growth oriented acquisitions: Good for RGP’s distribution growth
On April 28, Regency announced a cash distribution of 48 cents or $0.48 per outstanding common unit for the first quarter ended March 31, 2014.
Open capital markets mean easy access to funds for acquisitions
Access to funds An important factor in the frenzy of M&A (mergers and acquisitions) activity in the midstream MLP space has been the ease of access to funds. Master limited partnerships (MLPs) generally don’t keep much cash on their balance sheet, as with the MLP structure, the majority of excess cash flow is paid out […]
Must-know: Why is Regency’s acquisition of PVR Energy important?
Gas prices may be low now, but long-term gas drilling is here to stay in North America Currently, natural gas prices are relatively depressed, and short-term natural gas drilling activity on the whole doesn’t appear to be rising (see Why natural gas rigs aren’t likely to rise much through year-end). However, Regency’s purchase of PVR […]
Must-know: Key risks of Regency’s PVR Partners acquisition
Risks to PVR Partners The main risk to PVR Partners unitholders would be that the transaction doesn’t go through, as Regency purchased PVR for a significant premium (~25%), and if the transaction were in jeopardy or canceled, PVR shares would likely fall. The completion of the transaction is subject to a vote by PVR unitholders […]
Important benefits of Regency’s PVR Partners acquisition
PVR’s asset footprint complements Regency’s Regency management stated that PVR’s assets complemented Regency’s existing portfolio. While Regency’s existing assets are concentrated in the Eagle Ford (South Texas), the Permian (West Texas), and the Haynesville or Cotton Valley (North Louisiana), PVR’s assets are primarily in the Marcellus (Appalachia) and Granite Wash or Mississippi Lime (Midcontinent, Oklahoma, […]
Acquisition analysis: Key factors of PVR’s operation and location
PVR’s operations and the acquisition PVR’s operations fall into three divisions. Eastern Midstream Midcontinent Midstream Coal and Natural Resource Management The Eastern Midstream division comprises a natural gas trunkline and gathering assets in the Appalachia region, with exposure to the Marcellus Shale, and potential upside to the Utica Shale. PVR notes that the revenues it […]
Overview: Regency Energy’s Acquisition of PVR Partners
Regency Energy recently agreed to buy PVR Partners for a total transaction value of $5.6 billion. Learn about the transaction, what it signals, and potential risks.