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- Energy Transfer LP (NYSE:ET) has agreed to acquire Lotus Midstream Operations, LLC from an affiliate of EnCap Flatrock Midstream (EFM) for ~$1.45 billion.
- The consideration consists of $900 million in cash and ~44.5 million newly issued Energy Transfer common units.
- Lotus Midstream owns and operates Centurion Pipeline Company LLC, an integrated, crude midstream platform in the Permian Basin.
- The acquisition also includes a 5% equity interest in the Wink to Webster Pipeline, a 650-mile pipeline system transporting crude oil and condensate from the Permian Basin to the Gulf Coast.
- The acquisition will increase the Partnership’s footprint in the Permian Basin and provide increased connectivity for its crude oil transportation and storage businesses.
- Additionally, upon closing, Energy Transfer expects to begin construction on a 30-mile pipeline project to originate barrels from its Midland terminals for ultimate delivery to Cushing.
- The company expects the transaction to be immediately accretive to free cash flow, distributable cash flow per unit, and neutral to Energy Transfer’s leverage metrics.
- The transaction is expected to close in the second quarter of 2023.
- As of December 31, 2022, Energy Transfer revolving credit facility had an aggregate of $4.18 billion of available borrowing capacity.
- Price Action: ET shares are trading lower by 0.26% at $11.67 on the last check Monday.
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