Western Gas Announces Acquisition and

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Western Gas Partners, LP
WES
("WES" or the "Partnership") today announced that it has acquired Anadarko's 50% interest in the Delaware Basin JV gathering system. The Partnership paid no consideration at closing, but agreed to make a future payment on March 31, 2020 equal to eight times the average of the asset's 2018 and 2019 earnings before interest, taxes, depreciation and amortization ("EBITDA"), less the capital expenditures incurred by WES from the closing date through February 29, 2020. Based on its current forecast of the asset's performance and capital needs, the Partnership currently estimates the future payment will be $283 million. "This immediately accretive acquisition is another step towards the consolidation of our significant Delaware Basin position," said Chief Executive Officer Don Sinclair. "We will benefit from the asset's strategic position, the world-class resources in the Delaware Basin, and the addition of a 100% fee-based asset into our portfolio. Furthermore, the flexible financing structure assists us in maintaining our growth targets in a challenging environment." In conjunction with the acquisition, Anadarko has amended its existing gathering agreement with DBJV to extend the term to December 31, 2024. Gathering rates are determined using a cost-of-service methodology under which DBJV earns a targeted rate of return of 18% over the life of the agreement. The Partnership estimates that the net present value of the purchase price payment is $176 million and that the asset will generate $15 to $25 million of EBITDA in 2015. The terms of the acquisition were approved by the board of directors of the Partnership's general partner and by the board's special committee, which is comprised entirely of independent directors. The special committee engaged Evercore Partners to act as its financial advisor and Bracewell & Giuliani LLP to act as its legal advisor.
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