Regency Energy Partners and PVR Partners announced on Oct. 10 that their respective boards of directors have unanimously approved a definitive merger agreement, pursuant to which Regency will acquire PVR for approximately $5.6 billion, including the assumption of net debt of $1.8 billion.
The transaction, which is expected to close in the first quarter of 2014, will create a leading gas gathering and processing platform with a scaled presence across North America’s premier high-growth unconventional oil and gas plays in Appalachia, West Texas, South Texas, the Mid-Continent and North Louisiana. The acquisition better positions the combined company to capitalize on the long-term growth momentum of North American gas production through incremental, high-value expansions around its core asset base, as well as other growth and acquisition opportunities.
“This acquisition enhances our overall geographic diversity by providing Regency with a strategic presence in two prolific producing areas, the Marcellus and Utica shales in the Appalachian Basin and the Granite Wash in the Mid-Continent region,” said Michael J. Bradley, president and CEO of Regency.
Following the closing, the name of the combined company will remain Regency with headquarters in Dallas.
The addition of PVR’s asset base in Appalachia and the Mid-Continent region to Regency’s existing footprint in the Permian Basin, South Texas and North Louisiana will create a diversified, high-growth midstream company with assets in many of the most economic, high-growth unconventional oil and gas plays in North America: the Wolfcamp, Bone Springs, Avalon and Cline shale plays in the Permian Basin, the Eagle Ford shale play in South Texas, the Marcellus and Utica shale plays in Appalachia, the Granite Wash play in Oklahoma and Texas and the Haynesville Shale and Cotton Valley formation in North Louisiana.
Bradley will continue in his current role, and Thomas E. Long will continue as executive vice president and chief financial officer of the combined company.