Tulsa-based NGL Energy Partners LP announced on Monday the sale of its saltwater operations in North Dakota to an affiliate of Kansas City based Tallgrass Energy LP in a $91 million deal. It’s seen as a move by NGL to develop a stronger focus in the Permian Basin.
The NGL Water Solutions Bakken LLC included five saltwater disposal wells located in McKenzie and Dunn Counties in North Dakota. NGL indicated it made the move to exit the Bakken saltwater disposal business for two reasons: one is its Bakken operations were not a dominant position; and two, the firm plans to focus on other shale plays primarily in the Permian Basin.
NGL’s CEO, Mike Krimbill, stated: “The sale of our Bakken salt water disposal business advances our goal of reducing bank leverage to less than 3.25x by Fiscal Year End. We are pruning our water disposal business to further achieve prudent capital allocation, an increasing shift to a self-funding model and a continued focus on balance sheet strength and financial flexibility.”
“The addition of these assets to our recently expanded portfolio in the Bakken further enhances our presence in the basin and expands our services for our customers,” said TGE President and CEO, David G. Dehaemers Jr. “Over the past five years we have built preeminent water services infrastructure and this acquisition further expands our position as a leading provider of midstream water solutions in five of the nation’s most rapidly growing production regions.”