KMP to purchase TGP, EPNG for $6.22B
Kinder Morgan Energy Partners LP plans to acquire 100% of Tennessee Gas Pipeline (TGP) and a 50% interest in El Paso Natural Gas (EPNG) pipeline from Kinder Morgan Inc. for approximately $6.22 billion, including about $1.8 billion in assumed debt at TGP and approximately $560 million of proportional debt at EPNG. The company previously announced that KMI would offer to sell these assets to KMP to more than replace cash flow from certain assets KMP is divesting pursuant to an agreement KMI reached with the Federal Trade Commission in order to complete the El Paso Corp. acquisition. KMP expects to complete the divestiture process during the third quarter of 2012. KMP is purchasing the assets at about eight times 2012 EBITDA and expects that the purchase price will be an even lower multiple of 2013 EBITDA, given the full-year benefit of cost savings and expansion projects. KMP plans to fund 10% of the transaction value, net of debt assumed, with KMP units that will be issued to KMI at closing valued at approximately $387 million. The remaining value is expected to be funded with borrowings under a new $2 billion credit facility, and equity and debt issuances. TGP is a 13,900-mile pipeline system with a design capacity of about 7.5 billion cubic feet (Bcf) per day. It transports natural gas from Louisiana, the Gulf of Mexico and south Texas to the northeastern US, including the metropolitan areas of New York City and Boston. EPNG is a 10,200-mile pipeline system with a design capacity of about 5.6 Bcf per day. It transports natural gas from the San Juan, Permian and Anadarko basins to California, other western states, Texas and northern Mexico. Combined, TGP and EPNG have more than 200 Bcf of working natural gas storage capacity.
Douglas-Westwood launches oil, gas consulting practice in Houston
International energy business advisors Douglas-Westwood has opened a new office in Houston and appointed R. Michael Haney to lead its professional team. The new facility will manage the Douglas-Westwood group’s Advisory and Research business in Houston and across the Latin America region. Haney has more than a dozen years’ experience consulting for energy clients with Accenture, Arthur D. Little and Booz Allen Hamilton. He also worked in industry and investment banking and he co-founded and later sold a software technology startup. Haney has completed projects around the world, including in Saudi Arabia, Peru, Colombia, Algeria, and Korea. He holds degrees in Mechanical Engineering and Managerial Studies from Rice University in Houston, as well as an MBA from the University of Texas at Austin.
SandRidge makes $1.1B notes offering
SandRidge Energy Inc. has made a $1.1 billion offering of two series of senior notes, marking SandRidge’s largest capital markets transaction to date. The offering was comprised of $825 million of 7.5% senior notes due 2023 and $275 million of 7.5% senior notes due 2021. Proceeds will be used to finance a tender offer for $350 million of SandRidge’s senior notes maturing in 2014 and to fund capital expenditures. Covington & Burling advised SandRidge on the transaction.
Frontier Oilfield buys Chico Coffman Tank Trucks
Chico Coffman Tank Trucks Inc. and its subsidiary, Coffman Disposal LLC, has been acquired by Frontier Oilfield Services for a sum of $17,408,348.00. Coffman is a salt water disposal company with its primary base of operations located in North Texas with its trade and service area being in the Barnett Shale oil and gas field located in North Central Texas. Coffman had audited 2011 revenues on $40.5 million with an EBITA of $3,263,929. Coffman’s assets are currently valued on its financials at $24 million and consist of accounts receivables, rolling stock (trucks and trailers), six permitted disposal wells and the headquarters’ real property. Frontier Oilfield Services Inc.’s primary business focus is on wastewater recovery and disposal. Allegiance Capital Corp., a Dallas-based private M&A investment bank specializing in the lower middle market, acted as the exclusive financial advisor to Chico Coffman Tank Trucks.
EnCap Flatrock Midstream closes Fund II at $1.75B
EnCap Flatrock Midstream LLC has closed its second private equity fund, EnCap Flatrock Midstream Fund II LP, (EFM II) with total capital commitments of $1.75 billion. The fund exceeded its $1.25 billion target. EnCap Flatrock Midstream now has nearly $3 billion in investment commitments and has made commitments to 10 portfolio companies across Funds I and II. EFM II is EnCap Investments LP’s 16th institutional fund and brings the aggregate total raised by EnCap Investments over its 25-year history to more than $13 billion. Thompson & Knight served as legal counsel for the fund.
Halliburton acquires Petris Technology
Landmark Software and Services, a Halliburton business line, has acquired Petris Technology, a supplier of data-management and integration solutions to the energy industry. The acquisition comprises all of Petris’ integrated solutions, including the PetrisWINDS products, such as Recall Applications, Recall Data Management, DataVera, Enterprise, DrillNET, and Operations Management Suite – which will become available to Halliburton’s clients as a part of the DecisionSpace® portfolio.
TETRA Technologies completes Greywolf acquisition
TETRA Technologies Inc. has completed the acquisition of substantially all of the assets and business of Greywolf Production Systems for $55.5 million in cash. The acquisition was funded with a combination of available cash and borrowings under the company’s revolving credit facility. Greywolf is a well testing and flow back company headquartered near Calgary, Alberta, with Canadian operational centers in Crossfield and Grande Prairie, Alberta, and US operational centers in Williston, North Dakota, and Shoshoni, Wyoming. The company drew-down $50 million under from its $278 million revolving credit facility to fund a portion of the acquisition and for general corporate purposes. Following the draw-down, management estimates a remaining borrowing capacity of approximately $228 million.
Stratex makes offer for Magellan Petroleum
Stratex Oil & Gas Holdings Inc. has made an offer to acquire Magellan Petroleum for $2.30 per share in cash and stock. The offer was made in a letter to Magellan’s CEO with a copy to the Board of Directors August 27 after the CEOs of the two companies had previously discussed Stratex’s interest in acquiring Magellan, but had failed to come to any definitive understanding. At $2.30 per share, the offer provides a 137% premium to Magellan’s shareholders based on the August 24 closing price of $.97 and is 34% above Magellan’s 52-week high of $1.72. The total value of the transaction is approximately $124 million. Stratex has secured committed financing to complete the cash portion of the offer. In a prepared statement, Stephen Funk, CEO of Stratex said he believes combining the two companies would create greater value than the two entities could achieve separately.
Dart Energy sells Beckman Production Services
On July 31, 2012, Dart Energy Corp. completed the sale of Beckman Production Services Inc. to SCF Partners, a private equity fund based in Houston that invests exclusively in the services, manufacturing and equipment sectors of the oil and gas industry. Beckman is a well service company in the US that provides maintenance, workover, completion, and support services for oil and gas production primarily in Wyoming, North Dakota, Michigan, Pennsylvania and Oklahoma. Simmons & Company International served as exclusive financial advisor to Dart Energy.
Wood Group increases Eagle Ford presence with Duval acquisition
Wood Group has acquired Duval Lease Services and Freer Iron Works (Duval), a provider of maintenance, installation and fabrication services in the Eagle Ford shale region of Texas. Duval, which during the year to December 2011 generated sales of approximately $32 million, will operate as Wood Group Duval within Wood Group PSN. Duval has approximately 300 personnel and will continue to be led by the existing management team. As of April 2012, Duval held gross assets of $14 million.
Warburg Pincus invests in Hawkwood Energy
An affiliate of private equity firm Warburg Pincus, along with Ontario Teachers’ Pension Plan, has invested in Hawkwood Energy LLC, a new upstream oil and gas company. Together, the investment will reach up to $300 million. Denver, CO-based Hawkwood, which will seek to develop scalable oil and gas plays in known producing basins of the Rockies and Midcontinent, is led by CEO Patrick Oenbring and COO Leonard Gurule. Oenbring has nearly four decades of industry experience mainly at ConocoPhillips, Occidental Petroleum and Harvest Natural Resources. Gurule joined the company from Forest Oil Corp. where he served as a senior vice president.
NEAH forms MLP to provide field services to industry
Newco Energy Acquisition Holdings LLC (NEAH Energy), an energy-related asset and services acquisition firm, has formed Water Consolidated Holdings LP (WaterCo) to provide water treatment and processing services to the petroleum industry. NEAH Energy Holdings Inc. (NEAH Holdings), a wholly owned affiliate of NEAH Energy, will own the General Partner and Limited Partner interests in WaterCo. Merriman Capital has been selected as the financial advisor to NEAH Holdings and WaterCo and will be responsible for arranging capital, assisting with target acquisitions and other key corporate finance matters.
Prolamsa to build new US plant to produce pipe, tubular products
The Prolamsa Group plans to build a new manufacturing facility to produce pipe and tubular products to meet the growing demand of the US oil and natural gas industries. The investment is part of Prolamsa’s plan to grow its presence in the pipe and tube markets in the Americas. The facility is expected to cost nearly $150 million with a planned annual production capacity of 300,000 tons. It is anticipated the plant will begin operations in 2014. Several sites in the southeastern US are being evaluated.
