ONEOK, Inc. is buying a controlling curiosity in EnLink Midstream, LLC from World Infrastructure Companions (GIP).
The acquisition is for 43 p.c of Enlink’s excellent frequent items for $14.90 per unit and 100% of the pursuits within the managing member for $300 million, for whole money consideration of roughly $3.3 billion, ONEOK mentioned in a information launch.
ONEOK and GIP additionally entered right into a separate definitive settlement below which ONEOK will purchase from GIP all the fairness pursuits in Medallion Midstream, LLC, the biggest privately held crude gathering and transportation system within the Permian’s Midland Basin, for $2.6 billion in money.
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On account of the transaction, EnLink will likely be a consolidated subsidiary of ONEOK for GAAP monetary reporting functions, in keeping with the discharge.
After the closing of the acquisition of GIP’s pursuits in EnLink, ONEOK mentioned it intends to pursue the acquisition of the publicly held frequent items of EnLink in a tax-free transaction. The absolutely mixed ONEOK and EnLink asset bases can be anticipated to boost synergies, cut back leverage, and improve accretion to ONEOK shareholders.
The transactions will not be cross-conditional and are anticipated to shut early within the fourth quarter, ONEOK mentioned. The closing of every transaction is topic to customary closing circumstances, together with Hart-Scott-Rodino Act clearance.
ONEOK remarked that the transactions are extremely complementary to its present Permian pure gasoline liquid (NGL) and crude infrastructure platform and embrace 1.7 billion cubic ft per day (Bcfpd) of Permian gasoline processing capability and 1.6 million barrels per day (bpd) of Permian crude gathering capability. The corporate expects to capitalize on its expanded and built-in platforms within the Permian Basin to drive new service choices for producers within the area.
Additional, the EnLink transaction enhances ONEOK’s present built-in gasoline and NGL platform in Oklahoma and supplies ONEOK with gasoline gathering and processing operations in North Texas that produce strong money flows and are instantly related to Mont Belvieu by ONEOK’s NGL pipelines. The EnLink transaction additionally supplies ONEOK with a brand new place in Louisiana that features 220,000 bpd of NGL fractionation capability and roughly 4.0 Bcfpd of pure gasoline pipeline capability, each of that are related to key demand facilities. ONEOK famous that it expects the pure gasoline transmission belongings to learn from robust industrial demand development associated to knowledge facilities, liquefied pure gasoline, ammonia and hydrogen.
“ONEOK has a longstanding repute as being intentional in constructing a premier vitality infrastructure firm, and right now’s transactions additional solidify that standing by including complementary belongings that enable us to proceed increasing and lengthening our price chain,” ONEOK President and CEO Pierce Norton II mentioned.
“We’re significantly excited to meaningfully improve our firm’s presence within the Permian Basin, which is predicted to proceed driving the vast majority of U.S. oil and gasoline development. ONEOK has demonstrated its skill to deliver belongings collectively and seize synergies, and we’re assured that these accretive transactions will improve worth for our stakeholders and can enable us to offer enhanced choices throughout a number of ONEOK platforms.” Norton added.
ONEOK mentioned it has obtained financing commitments from JPMorgan Chase Financial institution, N.A. and Goldman Sachs Financial institution USA to offer as much as $6.0 billion to fund the combination money consideration and different bills in reference to the EnLink and Medallion transactions.
Upon closing of the EnLink transaction, ONEOK could have management of EnLink’s managing member and intends to switch the board members at the moment designated by GIP with new board members it plans to nominate.
ONEOK mentioned it can preserve its headquarters in Tulsa, Oklahoma, and “intends to retain a significant worker presence within the Dallas and Houston metropolitan areas”.
To contact the writer, e-mail rocky.teodoro@rigzone.com
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