NGL Energy Partners LP based in Tulsa announced it has closed on its previously announced $600 million acquisition of Hillstone Environmental Partners, LLC from Golden Gate Capital.
The purchase gives NGL a focus on water pipeline and disposal infrastructure solutions in the Permian Basin area at the New Mexico and Texas State line. The operations are mainly in the southern Eddy and Lea Counties of New Mexico and northern Loving County in Texas which are in the Delaware Basin. NGL already has existing water franchise in the area but the purchase gives an extended focus for the Oklahoma company.
“Combined with our recent acquisition of Mesquite , we now have over 250,000 acres dedicated to our Delaware Basin water disposal system, with 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.
The purchase expands NGL’s water disposal system to 58 disposal facilities, 112 injection wells and nearly 2.8 million barrels a day of operating disposal capacity in addition to nearly 380 miles of water disposal and transportation pipelines.
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 .
NGL financed this transaction utilizing $200 million of preferred equity, with the remaining balance funded under the Partnership’s revolving credit facility.
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.