Greentech Lead America: NGL Energy Partners signed merger
agreements with High Sierra Energy.
The combined consideration for the HSE entities is $693
million less assumed net debt.
The equity portion is expected to be approximately $433
million and the cash portion will be approximately $150 million.
High Sierra Energy’s crude oil segment handles
approximately 50,000 bbls/day of crude and controls 32 pipeline injection
facilities, three crude oil terminals (two of which provide barge service) and
approximately 90 tractor-trailers.
Its water services segment handles over 80,000 bbls of
water/day through a 60,000 bbls/day recycling plant; 7 disposal plants; and a
transportation and frac tank rental operation with 50 tractor trailers.
The natural gas liquids transportation and marketing
segment leases over 2,000 rail cars, owns 6 transloaders and leases 4 rail
sites to move approximately 45,000 bbls/day of natural gas liquids from coast
to coast.
“Combining NGL and High Sierra creates a dynamic and
diversified mid-cap MLP that will provide multiple services to upstream
customers including water treatment and transportation, crude oil gathering,
transportation and marketing as well as natural gas liquids transportation and
marketing,” said H. Michael Krimbill, CEO of NGL.
“With our combined fleet of more than 3,000 rail
cars, 18 natural gas liquids terminals from coast to coast, 3 crude oil
terminals, over 90 trucks, a substantial wholesale marketing and supply network
plus retail demand in excess of 140 million gallons of propane annually, we
will be a full service midstream solution for gas plant and fractionation
operators, crude oil producers, refiners and retailers across the
country,” Krimbill added.
“NGL will have four segments upon completion of the
mergers: water treatment, disposal , recycling and transportation; crude Oil,
gathering, transportation and marketing; natural gas liquids transportation and
marketing and retail propane. The partnership will have a substantial presence
in all of these segments and look to grow them at attractive multiples,”
said Stephen D. Tuttle, president of Midstream.
“This merger has great synergies and creates a
diversified midstream company with multiple solutions for the producer
operating in some of the country’s most prolific oil and gas plays. The
combined entity will have a strong balance sheet and ready access to the public
debt and equity markets,” said James J. Burke, CEO of High Sierra.