Regency Energy Partners LP (NYSE:
RGP) (Regency) today announced plans to purchase the midstream
assets of Hoover Energy Partners LP (Hoover). The acquisition, valued at
approximately $290 million, will complement Regency’s existing footprint
in the southern portion of the Delaware Basin and expands its services
to producers into crude and water gathering.
Hoover’s midstream services include crude oil gathering, transportation
and terminaling, condensate handling, natural gas gathering, treating,
processing, and water gathering and disposal services. The Perry Ranch
Station is a major destination for crude gathered by a customer in the
region and is backed by a 20-year dedication. In addition, Hoover’s
Delaware Water System is the only open-access water gathering and
disposal system in the Delaware Basin.
“This acquisition further extends Regency’s presence in the Delaware
Basin in West Texas and supports our goal of diversifying our service
offerings to our customers by adding crude and water gathering
services,” said Jim Holotik, executive vice president and chief
commercial officer of Regency. “Hoover’s geographic footprint enhances
our existing Permian Basin service capabilities and expands our
strategic presence in the developing Bone Spring, Wolfcamp and Wolfbone
producing areas.”
Regency expects the acquisition to be accretive in 2014 and to finance
the acquisition by issuing approximately $98 million of Regency common
units to Hoover. The remaining portion of the consideration will be
funded from borrowings under Regency’s revolving credit facility. The
acquisition is expected to close in the first quarter of 2014, and is
subject to Hart-Scott-Rodino Antitrust Improvements Act approval and
other customary closing conditions.
This release includes “forward-looking” statements. Forward-looking
statements are identified as any statement that does not relate strictly
to historical or current facts. Statements using words such as
“anticipate,” “believe,” “intend,” “project,” “plan,” “expect,”
“continue,” “estimate,” “goal,” “forecast,” “may” or similar expressions
help identify forward-looking statements. Although we believe our
forward-looking statements are based on reasonable assumptions and
current expectations and projections about future events, we cannot give
any assurance that such expectations will prove to be correct.
Forward-looking statements are subject to a variety of risks,
uncertainties and assumptions. These risks and uncertainties include the
risks that these transactions may not be consummated or the benefits
contemplated therefrom may not be realized. Additional risks include:
volatility in the price of oil, natural gas, and natural gas liquids,
declines in the credit markets and the availability of credit for the
Partnership as well as for producers connected to the Partnership’s
system and its customers, the level of creditworthiness of, and
performance by the Partnership’s counterparties and customers, the
Partnership's ability to access capital to fund organic growth projects
and acquisitions, including significant acquisitions, and the
Partnership’s ability to obtain debt and equity financing on
satisfactory terms, the Partnership's use of derivative financial
instruments to hedge commodity and interest rate risks, the amount of
collateral required to be posted from time-to-time in the Partnership's
transactions, changes in commodity prices, interest rates, and demand
for the Partnership's services, changes in laws and regulations
impacting the midstream sector of the natural gas industry, weather and
other natural phenomena, acts of terrorism and war, industry changes
including the impact of consolidations and changes in competition, the
Partnership's ability to obtain required approvals for construction or
modernization of the Partnership's facilities and the timing of
production from such facilities, and the effect of accounting
pronouncements issued periodically by accounting standard setting
boards. Therefore, actual results and outcomes may differ materially
from those expressed in such forward-looking statements.
These and other risks and uncertainties are discussed in more detail in
filings made by the Partnership with the Securities and Exchange
Commission, which are available to the public. The Partnership
undertakes no obligation to update publicly or to revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Regency Energy Partners LP (NYSE:
RGP) is a growth-oriented, master limited partnership
engaged in the gathering and processing, contract compression, contract
treating and transportation of natural gas and the transportation,
fractionation and storage of natural gas liquids. Regency’s general
partner is owned by Energy Transfer Equity, L.P. (NYSE:
ETE). For more information, please visit Regency’s website at www.regencyenergy.com.
Copyright Business Wire 2013