Targa Resources Corp. has executed definitive agreements for its subsidiary, Targa Resources Partners LP, to acquire 100% of the membership interests of Outrigger Delaware Operating, LLC, Outrigger Southern Delaware Operating, LLC and Outrigger Midland Operating, LLC. The company will pay an initial cash consideration of $565 million for the membership interests.
The Outrigger Delaware gas gathering and processing and crude gathering assets are located in Loving, Winkler and Ward counties. They include 70 million cubic feet per day of processing capacity and 40,000 barrels per day of crude gathering capacity. Targa plans to connect the Outrigger Delaware assets to Targa’s existing Sand Hills system and plans to evaluate future connections from Outrigger Delaware to its Versado system.
The Outrigger Midland gas gathering and processing and crude gathering assets are located in Howard, Martin and Borden counties. Outrigger Midland currently has 10 million cubic feet per day of processing capacity and 40,000 barrels per day of crude gathering capacity. Targa expects to connect the Outrigger Midland assets to Targa’s WestTX system in Martin County.
“The acquisition of the Outrigger Permian assets complements our existing gas gathering and processing footprint very nicely, while expanding our reach deeper into both the Delaware and Midland Basins,” said Joe Bob Perkins, Chief Executive Officer of the Company. “The producer acreage that we will serve through this acquisition has decades of drilling inventory in prolific areas, with multiple stacked pay zones. We also are excited about the opportunities to combine Outrigger Permian’s existing crude gathering infrastructure and our expertise in crude gathering in another basin as a new platform for growth in the Permian.”
Completion of this transaction is subject to customary regulatory approvals and other closing conditions. The transaction is expected to close in the first quarter of 2017.