NGL Energy Partners LP Announces Definitive Agreement to Acquire Hillstone
NGL Energy Partners LP announced it has executed a definitive agreement to acquire all of the equity interests of Hillstone Environmental Partners, LLC from Golden Gate Capital for approximately $600 million, subject to certain adjustments.
Hillstone provides water pipeline and disposal infrastructure solutions to producers with a core operational focus in the state line area of southern Eddy and Lea Counties, New Mexico and northern Loving County, Texas in the Delaware Basin.
Hillstone has a fully interconnected produced water pipeline transportation and disposal system, which currently consists of 19 salt water disposal wells, representing approximately 580,000 barrels per day of permitted disposal capacity, and a newly-built network of produced water pipelines with approximately 680,000 barrels per day of transportation capacity. Hillstone also has an additional 22 permits to develop another 660,000 barrels per day of disposal capacity.
All of the water volumes on Hillstone’s Northern Delaware Basin system are delivered via multiple, large-diameter pipelines. Hillstone also has an aggregate of over 110,000 acres contracted under long-term dedications with priority disposal rights or minimum volume commitments.
“This transaction is highly complementary to our Delaware Basin asset footprint. It … adds a redundant, interconnected produced water pipeline system with significant permitted disposal capacity that fits perfectly within our existing footprint,” stated Mike Krimbill, NGL’s CEO.
“The certainty of offtake and reliability of our integrated system of large diameter pipelines will provide approximately 2.7 million barrels per day of operational disposal capacity in the Delaware Basin, including the addition of Hillstone,” stated Doug White, NGL’s Executive Vice President of Water Solutions. “The high-quality Hillstone assets include long-term contracts with investment grade producers. The contracts have an average remaining term of greater than 10 years, minimum volume commitments, and first call priority volume commitments that minimize impacts of timing related to recycle and reuse activities.”
NGL expects the transaction to close in 2019.
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