Enterprise Products, Ferrellgas Partners Put Midstream M&A In Motion

Midstream M&A In Motion
With its acquisition of Dallas-based Bridger Logistics, Ferrellgas Partners expands its midstream footprint and adds to a growing midstream M&A trend.

Although upstream mergers and acquisitions has had a slow start in the first half of 2015, the midstream sector is picking up the pace.

On Monday, Dallas-based Pioneer Natural Resources, along with Reliance Holding USA Inc. agreed to sell their Eagle Ford midstream business to an affiliate of Enterprise Products Partners LP for $2.15 billion. Pioneer owns 50.1 percent of the assets, and Reliance owns the remaining 49.9 percent. The midstream unit provides gas gathering, treating, compression and condensate processing services in the Eagle Ford shale. Enterprise will pay for the business in two installments, $1.15 billion at closing, which is expected in the third quarter, and $1 billion a year after closing.

“The sale of EFS midstream will further improve our already strong balance sheet and allow us to strategically redeploy capital to our core, oil-rich Spraberry/Wolfcamp asset in the Permian Basin of West Texas, which we have successfully transformed from a vertical play into a world-class horizontal play,” said Pioneer CEO Scott Sheffield in a statement.

Also on Monday, Ferrellgas Partners unveiled plans to buy Dallas-based Bridger Logistics for $838 million. Expected to close in July, the transaction consists of $563 million in cash and $11.2 million in Ferrellgas common units, according to a news statement. It represents an 8.4 multiple on Bridger’s estimated earnings for a 12-month period. As part of the deal, Ferrellgas’ board approved a $0.125 increase in its quarterly distribution.

Bridger, which provides integrated crude oil midstream services, has operations in 14 states and a presence in most major U.S. oil plays, including the Permian, Bakken, Rockies, Niobrara, Mid-Continent, Gulf Coast and Eagle Ford. Those assets are expected to be immediately accretive to Kansas-based Ferrellgas, and give it a platform to expand its distribution services.

Ferrellgas, one of the nation’s largest propane retailers, has only been in the midstream game since last May, when it acquired Sable Environmental LLC.

In a recent report, Foster Mellen noted that U.S. midstream activity is dominating energy’s M&A field. Other recent midstream transactions include Houston pipeline giant Kinder Morgan Inc.’s $3 billion purchase of Hiland Partners, and Vanguard Natural Resources purchase of two midstream rivals, Eagle Rock Energy Partners and LRR Energy LP.

An award-winning journalist, Deon has reported on energy, business and politics for almost 20 years.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies

Our Privacy Pledge

More from this Author
Deon Daugherty
Senior Editor | Rigzone
 -  The Rigzone Interview: Private Equity ... (Jul 13)
 -  Could Argentinian Politics Beat the Va... (Jul 10)
 -  The Rigzone Interview: Oil, Gas Goes D... (Jul 6)
 -  Deal Of The Month: EQT, Rice Energy Me... (Jun 30)
 -  OpEd: OPEC Production Cuts Fail, Marke... (Jun 27)

Most Popular Articles

From the Career Center
Jobs that may interest you
Land GIS Spatial Analyst - Mineral Land
Expertise: Contracts Engineer|Geologist|Lease Analyst
Location: Denver, CO
Regional Sales Executive
Expertise: Business Development|Sales
Location: Jacksonville, FL
Land Representative - MCBU Midland Surface
Expertise: Landman
Location: Midland, TX
search for more jobs

Brent Crude Oil : $48.06/BBL 2.51%
Light Crude Oil : $45.77/BBL 2.17%
Natural Gas : $2.97/MMBtu 2.30%
Updated in last 24 hours