NGL Energy Partners LP Closes Acquisition of Hillstone

NGL Energy Partners LP (NGL) has announced it has closed its acquisition of all equity interests of Hillstone Environmental Partners, LLC (Hillstone) from Golden Gate Capital for approximately $600 million.

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, which complements NGL’s existing Delaware Basin water franchise.

 “Combined with our recent acquisition of Mesquite, we now have…over 330,000 barrels per day of minimum volume commitments and an acreage weighted average remaining contract term of over 10 years,” stated Doug White, NGL’s Executive Vice President of Water Solutions.

“Our Delaware Basin water disposal system now consists of approximately 58 disposal facilities, 112 injection wells, approximately 2.8 million barrels per day of operating disposal capacity and approximately 380 miles of water disposal and transportation pipelines. We expect over 80% of the volumes on this system to be delivered via pipeline and to continue to grow our pipeline infrastructure and interconnectivity of the system,” said White.

The long-term, fee-based Delaware Basin contracts acquired through this acquisition include the following:

  • 20-year Poker Lake acreage dedication, including first-call rights for water disposal covering approximately 70,000 acres, with XTO Energy, an ExxonMobil subsidiary;
  • 10-year acreage dedication, including first call rights, with a leading independent exploration and production company; and
  • Multiple contracts, including certain minimum volume commitments and acreage dedications, with one of the largest crude oil and natural gas exploration and production companies in the United States.

Barclays acted as financial advisor to NGL. Winston & Strawn LLP acted as legal counsel to NGL on the Hillstone transaction. Hunton Andrews Kurth LLP served as legal counsel to NGL on the preferred equity financing transaction.

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