NGL Energy Partners LP NGL announced today that it has acquired the
water disposal and hauling business of Oilfield Water Lines LP (“OWL”), a
partnership with High Roller Wells and the Mark Cuban Companies for 2,463,287
common units and $168 million in cash, plus net working capital. The
acquisition expands NGL's water services business by adding four high
capacity, strategically located, oil and gas water disposal facilities to its
portfolio of water treatment and gathering infrastructure. The acquisition
brings a successful operating team to NGL's water services business and
approximately 90,000 barrels per day of additional disposal capacity in the
growing Eagle Ford Shale in South Texas, a major US oil producing region.
The Partnership is increasing its Fiscal 2014 Adjusted EBITDA guidance from
$240-$245 million to $255-$260 million as the additional assets are integrated
and contribute Adjusted EBITDA for eight months in Fiscal 2014. For the full
twelve months ending March 31, 2015 NGL anticipates Adjusted EBITDA from this
transaction to exceed $35 million.
The agreement with OWL includes a provision whereby the purchase price may be
increased if certain performance targets are achieved. If the acquired assets
generate Adjusted EBITDA, as defined in the agreement, in excess of $40
million on an annualized basis during any one of the six months following the
acquisition, the purchase price will be increased by six times the amount by
which this target is exceeded. The maximum potential increase to the purchase
price under this provision is $60 million.
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