Enterprise Products Partners has closed on its purchase of the member interests in EFS Midstream LLC from affiliates of Pioneer Natural Resources Co. and Reliance Holding USA Inc.
The purchase price of $2.15 billion is being paid in two installments. The first installment of $1.15 billion was paid at closing July 8 with the final payment of $1.0 billion to be made no later than the first anniversary of the closing date. The effective date of the transaction is July 1, 2015.
EFS Midstream provides natural gas gathering, treating, compression and condensate processing services in the Eagle Ford Shale.
The EFS Midstream system includes approximately 460 miles of natural gas gathering pipelines, 10 central gathering plants, 780 million cubic feet per day of natural gas treating capacity and 119 thousand barrels per day of condensate stabilization capacity.
“We are pleased to close this acquisition,” said Michael A. Creel, CEO of Enterprise’s general partner. “These assets ‘bolt on’ to our existing Eagle Ford crude oil, natural gas and NGL infrastructure network. We are looking forward to expanding our capabilities to provide Pioneer and Reliance as well as new customers with market flow assurance and market access. Supported by long-term, fixed-fee contracts and minimum volume commitments, this transaction will be immediately accretive to distributable cash flow per common unit and support future distribution growth.”
Under the terms of the agreements, the Pioneer and Reliance joint development dedicated its Eagle Ford Shale acreage to Enterprise under a 20-year, fixed-fee gathering agreement that includes a minimum volume requirement for the first seven years.
Pioneer and Reliance also dedicated their Eagle Ford Shale acreage under related 20-year fee-based agreements with Enterprise for natural gas processing, natural gas liquids transportation and fractionation, and for natural gas, processed condensate and crude oil transportation services.
After closing the transaction, Enterprise consolidated liquidity of approximately $4.3 billion, which is comprised of unrestricted cash on hand and available borrowing capacity under its $3.5 billion multi-year revolving credit facility and $1.5 billion 364-day credit facility.