Energy Transfer to own general partner, incentive distribution
rights, and approximately 65% of total limited partner interests in
Complementary asset base of PennTex and Energy Transfer positions ETP
for significant growth and value creation in northern Louisiana
DALLAS--(BUSINESS WIRE)--Oct. 25, 2016--
Energy Transfer Partners, L.P. (NYSE: ETP) today announced it has
entered into a definitive agreement to acquire certain interests in
PennTex Midstream Partners, LP (NASDAQ: PTXP) from various parties
(“Sellers”) for total consideration of approximately $640 million. Upon
closing the transaction, ETP will own 100% of the general partner of
PTXP, together with all of its incentive distribution rights (IDRs), as
well as 6.3 million common units and all 20 million subordinated units
of PTXP, representing approximately 65 percent of the total limited
partner interests in PTXP.
The acquisition consideration paid by ETP will be 50 percent ETP common
units issued directly to Sellers and 50 percent cash. The cash portion
of the purchase price will be funded with a combination of proceeds from
common units recently issued under ETP’s At-The-Market program and
borrowings under its revolving credit facility. Additionally, in
conjunction with the transaction, Energy Transfer Equity, L.P. (NYSE:
ETE) has agreed to an IDR waiver in the amount of $33 million annually
that will run in perpetuity.
PTXP owns midstream assets strategically located in the Terryville
Complex in northern Louisiana that consist of a rich natural gas
gathering system, two cryogenic natural gas processing plants totaling
400 million cubic feet per day of capacity, along with residue gas and
natural gas liquids (NGLs) pipelines. These assets complement ETP’s
existing midstream footprint in the region and position ETP for
significant growth and value creation.
PTXP’s primary customer is Range Resources Corporation (NYSE: RRC). In
addition to long-term fee-based gathering and processing agreements that
include minimum volume commitments, PTXP and RRC are parties to an
agreement, which provides PTXP the exclusive right to build all of the
midstream infrastructure for RRC within an area of mutual interest (AMI)
in northern Louisiana and to provide midstream services to support RRC’s
current and future production on substantially all of its operated
acreage within the AMI.
The transaction is expected to close in the fourth quarter of 2016,
subject to customary closing conditions.
Credit Suisse acted as the financial advisor to ETP for the transaction.
Andrews Kurth Kenyon LLP served as legal counsel to ETP.
Energy Transfer Partners, L.P. (NYSE: ETP) is a master limited
partnership that owns and operates one of the largest and most
diversified portfolios of energy assets in the United States. ETP’s
subsidiaries include Panhandle Eastern Pipe Line Company, LP (the
successor of Southern Union Company) and Lone Star NGL LLC, which owns
and operates natural gas liquids storage, fractionation and
transportation assets. In total, ETP currently owns and operates more
than 62,500 miles of natural gas and natural gas liquids pipelines. ETP
also owns the general partner, 100% of the incentive distribution
rights, and approximately 67.1 million common units in Sunoco Logistics
Partners L.P. (NYSE: SXL), which operates a geographically diverse
portfolio of pipelines, terminalling and acquisition and marketing
assets. ETP’s general partner is owned by Energy Transfer Equity, L.P.
For more information, visit the Energy Transfer Partners, L.P. website
PennTex Midstream Partners, LP is a growth-oriented master
limited partnership focused on owning, operating, acquiring and
developing midstream energy infrastructure assets in North America. PTXP
provides natural gas gathering and processing and residue gas and
natural gas liquids transportation services to producers in the
Terryville Complex in northern Louisiana. For more information, visit www.penntex.com.
This news release may include certain statements concerning expectations
for the future that are forward-looking statements as defined by federal
law. Such forward-looking statements are subject to a variety of known
and unknown risks, uncertainties, and other factors that are difficult
to predict and many of which are beyond management’s control. An
extensive list of factors that can affect future results are discussed
in the Partnership’s Annual Report on Form 10-K and other documents
filed from time to time with the Securities and Exchange Commission. The
Partnership undertakes no obligation to update or revise any
forward-looking statement to reflect new information or events.
The information contained in this press release is available on our
website at www.energytransfer.com.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161025005687/en/
Source: Energy Transfer Partners, L.P.
Lyndsay Hannah, 214-981-0795
Vicki Granado, 214-498-9272