United States oil and fuel pipeline operator ONEOK Inc. stated Sunday it’ll buy the remaining issued share capital of EnLink Midstream LLC, which it just lately took over from World Infrastructure Companions (GIP).
Final month Tulsa, Oklahoma-based ONEOK stated it had accomplished the acquisition of 43 p.c of EnLink’s widespread shares — thereby the controlling stake — held by GIP. Sunday’s definitive merger settlement with EnLink will see ONEOK redeem the remaining publicly held models.
“Below the settlement, every excellent widespread unit of EnLink that ONEOK doesn’t already personal shall be transformed into 0.1412 shares of ONEOK widespread inventory”, ONEOK stated in a press release on-line. “The change ratio was derived by dividing $15.75 per unit, equal to EnLink’s market shut value on Nov. 22, 2024, by ONEOK’s 10-day volume-weighted common value”.
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In whole ONEOK expects to concern about 37 million shares, which symbolize round six p.c of its whole excellent shares and quantity to $4.3 billion. ONEOK trades on the New York Inventory Change.
Anticipated to conclude within the first quarter of 2025, the transaction is topic to customary closing situations together with approval by a majority of holders of excellent EnLink widespread shares, ONEOK stated.
Nevertheless, the merger settlement is taken into account to have already handed regulatory anti-trust clearance. ONEOK stated “no additional regulatory approval is important, as ONEOK filed below the Hart-Scott-Rodino Act in reference to its beforehand introduced acquisition of the controlling curiosity in EnLink [from GIP], and the mandatory ready interval, together with for this transaction, has been accomplished”.
Pierce H. Norton II, ONEOK president and chief govt, stated, “This tax-free transaction to amass the remaining excellent EnLink models is anticipated to be accretive to ONEOK shareholders and supply EnLink unitholders with considerably higher buying and selling liquidity and a sexy dividend yield”.
EnLink provides 1.7 billion cubic ft a day (Bcfd) of Permian pure fuel processing capability and 1.6 million barrels per day (MMbd) of Permian crude oil gathering capability to ONEOK’s portfolio, the brand new proprietor stated August 28 saying two acquisition agreements with GIP. ONEOK acquired GIP’s stake for a complete money consideration of roughly $3.3 billion.
The opposite settlement with GIP, now below BlackRock Inc., additionally transferred Medallion Midstream LLC to ONEOK for $2.6 billion. Medallion’s belongings embrace over 1,200 miles of petroleum gathering pipelines that present about 1.3 MMbd of capability and about 1.5 million barrels of crude oil storage within the Permian Basin.
ONEOK later agreed to promote three pure fuel pipelines with an combination capability of three.7 Bcfd to DT Midstream Inc. for $1.2 billion.
Anticipated to shut by yearend or early 2025, the transaction includes 1,300 miles of pipelines straddling seven states “within the engaging Midwest market area which is anticipated to expertise continued development in energy demand”, Detroit, Michigan-based DT Midstream stated in a press release November 19.
The money transaction, which includes no assumed debt, consists of Guardian Pipeline LLC, Midwestern Gasoline Transmission Co. and Viking Gasoline Transmission Co. — all regulated by the Federal Power Regulatory Fee. Employees will switch to the brand new proprietor.
The transaction is topic to anti-trust critiques by the Justice Division or the Federal Commerce Fee.
The divestment to DT Midstream is “anticipated to boost ONEOK’s monetary flexibility and ONEOK’s deleveraging development towards its beforehand introduced goal of three.5 instances throughout 2026”, ONEOK stated individually.
“Based mostly on Federal Power Regulatory Fee filings, the acquisition value represents 10.8 instances earlier 12 months EBITDA as of June 30, 2024”, ONEOK stated.
Norton, the ONEOK chief govt, stated, “This transaction will align and improve our capital allocation priorities inside our built-in working footprint”.
To contact the creator, electronic mail jov.onsat@rigzone.com
