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CenterPoint
Energy, Inc.
CNP, OGE Energy Corp.
OGE and ArcLight Capital
Partners, LLC (ArcLight) announced today that they have entered into an
agreement to form a master limited partnership that will include CenterPoint
Energy's interstate pipelines and field services businesses and the midstream
business of Enogex LLC, owned jointly by subsidiaries of OGE and Arclight. The
partnership will be managed by a general partner whose governance will be
shared by CenterPoint Energy and OGE on a 50/50 basis.
(Logo: http://photos.prnewswire.com/prnh/20020930/CNPLOGO)
Creation of a New Leading Midstream Company
The new partnership will own and operate 8,400 miles of interstate pipelines
with nearly 9 billion cubic feet of transport capacity and nearly 2,300 miles
of intrastate pipelines. It will also have more than 11,000 miles of gathering
lines, which in 2012 moved nearly 4 billion cubic feet of natural gas per day.
Additionally, it will have more than 90 billion cubic feet of natural gas
storage capacity and 11 major processing plants with nearly 2 billion cubic
feet per day of inlet capacity.
The partnership will benefit from:
o Enhanced scale
o Geographic diversification, with operations in major natural gas and
liquids-rich producing areas of Oklahoma, Texas, Arkansas and Louisiana
o Significant asset positions in a broad range of basins, including the
Granite Wash, Tonkawa, Mississippi Lime, Cana Woodford, Haynesville,
Fayetteville, Barnett and Woodford plays
o Enhanced supply and market access
o Meaningful operating and commercial synergies
o Stable and predictable cash flows from a balanced and diversified
portfolio of assets
o Independent access to capital
The partnership's leadership team will be announced after regulatory approvals
are received. Prior to closing both companies will continue to operate
independently, and teams of personnel from both companies will develop an
integration plan that can be implemented once the transaction has closed.
Transaction Terms and Other Details
The companies expect to close the formation of the partnership in the second
or third quarter of 2013, following receipt of customary regulatory approvals
and certain third-party consents. Under the terms of the agreement, the new
partnership will seek to arrange a new $1.4 billion credit facility as well as
a $1.05 billion term loan. The transaction has been approved by the board of
directors of CenterPoint Energy and OGE Energy, as well as ArcLight.
Subject to certain adjustments at closing, CenterPoint Energy, OGE Energy and
ArcLight will have 59 percent, 28 percent and 13 percent limited partner
interest in the partnership, respectively. CenterPoint Energy and OGE Energy
will hold 40 percent and 60 percent interests, respectively, in the incentive
distribution rights of the general partner.
Pursuant to a registration rights agreement to be signed upon the closing of
the transaction, OGE and CenterPoint Energy will agree to initiate the process
for the sale of equity interests in the partnership in an initial public
offering (IPO). In consultation with ArcLight, OGE, CenterPoint Energy and the
partnership will determine the financial and other terms of any such IPO. The
execution of any IPO is subject to market conditions and the parties can give
no assurance that such an IPO will in fact take place.
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