Kinder Morgan Inc. sold the entire roughly 5% equity stake in Pembina Pipeline Corp. it had received as part of Pembina’s recent purchase of Kinder Morgan Canada.
The $764 million of net proceeds from the sale will be used to pay down debt, the Houston-based company said Jan. 9.
In August, Calgary, Alberta-based Pembina agreed to Kinder Morgan’s Canadian affiliate in exchange for roughly 25 million Pembina shares, which were estimated to be worth about $935 million in pre-tax proceeds, per a company news release dated Aug. 21, 2019.
In conjunction, Kinder Morgan also sold its ownership of the U.S. portion of the Cochin Pipeline to Pembina for about $1.5 billion.
“This exit comes sooner than expected pointing to a single buyer of the position with net proceeds to [Kinder Morgan] of $764 million equating to TPH estimates of about $910 million pre-tax, or a marginal discount (2%-4%) to the trading range since Dec. 16 closing,” analysts with Tudor, Pickering, Holt & Co. wrote in a Jan. 10 research note.
The Lundin Petroleum board also proposed to change the company's name to Lundin Energy AB, it said in a statement.
The increase in oil and gas bankruptcies seems likely to continue, said Buddy Clark, partner at Haynes and Boone.
Shares of Encana will be suspended from trading on the New York and Toronto stock exchanges on Jan. 27 at which time the company will begin trading as Ovintiv under the “OVV” symbol.