Summer Sees Slow M&A Activity

The overall number of mergers and acquisitions in the midstream sector slowed moderately in the summer. On noteworthy deal was Western Gas Partners LP’s agreement to acquire the Bison gas treating facility and related assets in Powder River Basin from Anadarko Petroleum Corporation for $130 million.

“The cash flow profile of the Bison assets, which is 100% fee based and entirely supported by demand changes, is a great asset to our portfolio,” said Western Gas Partners president and chief executive Don Sinclair. The assets are in northeastern Wyoming and have a combined CO2 treating capacity of 450 MMcf per day. Western Gas plans to finance the acquisition with $25 million of cash on hand and the issuance of 2,950,284 common units to Anadarko and 60,210 general partner units to Western Gas Holdings LLC, the partnership’s general partner, at an implied price of $34.88 per unit.

On the equity front, Enbridge Energy Partners LP announced that it has priced an underwritten public offering of 7 million Class A Common Units at a price of $30 per unit. The underwriter of the offering exercised an option to purchase an additional 1.05 million units to cover over-allotments. The partnership expects net proceeds from the offering to be about $233.7 million. Enbridge Energy Partners LP will use the net proceeds to repay a portion of its outstanding commercial paper, to repay any credit facility borrowings that are outstanding or to fund a portion of its capital expansion projects.

Elsewhere, Mark West Energy Partners LP announced it is offering 3.5 million common units at $48 per unit. It intends to use the net proceeds of the offering, about $161 million, to repay a revolving credit facility and to partially fund its ongoing capital expenditure program. The partnership has granted the underwriter a 30-day option to purchase up to 525,000 additional common units to cover any potential over allotments.