Pipeline builder to sell some of its North Dakota holdings in a $1.6 billion deal

A week after announcing it would join forces with Williams Cos. of Tulsa to build two new natural gas pipelines across Oklahoma, Targa Resources Corp announced it is selling some of its interest in the firm’s North Dakota operations in a $1.6 billion cash deal.

Targa said it has entered definitive agreements to sell its 45 percent interest in Targa Badlands LLC  to funds managed by GSO Capital Partners and Blackstone Tactical Opportunities. Targa Badlands holds all of Targa’s assets in North Dakota.

 

Targa Resources Corp. announced today that it has entered into definitive agreements to sell a 45 percent interest in Targa Badlands LLC, the entity that holds all of Targa’s assets in North Dakota, to funds managed by GSO Capital Partners and Blackstone Tactical Opportunities for $1.6 billion in cash.

Under the terms of the executed agreements, Targa will continue to be the operator and will hold majority governance rights in Badlands. Future growth capital is expected to be funded on a pro rated basis. Badlands will pay a minimum quarterly distribution to Blackstone and to Targa based on their initial investments, and Blackstone’s capital contributions will have a liquidation preference upon a sale of Badlands.

The Badlands assets and operations are located in the Bakken and Three Forks Shale plays of the Williston Basin in North Dakota and include approximately 480 miles of crude oil gathering pipelines, 125,000 barrels of operational crude oil storage, approximately 260 miles of natural gas gathering pipelines and the Little Missouri natural gas processing plant with a current gross processing capacity of approximately 90 million cubic feet per day.

Targa expects to use the net cash proceeds to pay down debt and for general corporate purposes including funding its growth capital program. The transaction is expected to close in the second quarter of 2019 and is subject to customary regulatory approvals and closing conditions.

It was last week when Targa and Williams Cos. announced a joint-agreement to build new gas lines from southern Oklahoma and central Kansas to connect with operations in Kingfisher County. The story was reported by OK Energy Today.

 

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