Phillips 66 Partners LP agreed to acquire a 50% stake in the Liberty Pipeline, a $1.6 billion project to transport Rockies and Bakken crude oil production to Oklahoma’s Cushing hub.
According to a Feb. 21 news release from the Houston-based company, Phillips 66 Partners will acquire the interest as part of a roughly $75 million dropdown agreement with Phillips 66 Co. The company said it plans to fund the transaction through a combination of cash on hand and its revolving credit facility.
Greg Garland, CEO of both Phillips 66 and its MLP, described Liberty Pipeline, which is underpinned with long-term volume commitments, as a great addition to the Phillips 66 Partners portfolio.
“It is a strong organic project and continues our strategy of growing [Phillips 66 Partners] with stable fee-based cash flows, supported by long-term volume commitments,” Garland said in a statement. “Phillips 66 Partners is well-positioned to execute this pipeline project on the heels of successfully starting up the Gray Oak Pipeline.”
Service on the 24-inch Liberty Pipeline is targeted to commence in first-half 2021. The cost of the pipeline is expected to be about $800 million net to Phillips 66 Partners. Bridger Pipeline LLC owns the remaining 50% interest in Liberty.
The purchase price for the dropdown reflects the reimbursement of project costs incurred by Phillips 66 prior to the March 1 effective date of the transaction, according to the release.
The transaction is expected to close March 2. The Phillips 66 Partners conflicts committee engaged Evercore to act as its financial adviser and Vinson & Elkins LLP as its legal counsel for the deal.
Recommended Reading
SLB Earnings Rise, But Weakened 4Q and 2025 Ahead Due to Oil Glut
2024-10-22 - SLB, like Liberty Energy, revised guidance lower for the coming months, analysts said, as oilfield service companies grapple with concerns over an oversupplied global oil market.
Viper Energy Offers 10MM Shares to Help Pay for Permian Basin Acquisition
2024-09-12 - Viper Energy Inc., a Diamondback Energy subsidiary, will use anticipated proceeds of up to $476 million to help fund a $1.1 billion Midland Basin deal.
ConocoPhillips Hits Permian, Eagle Ford Records as Marathon Closing Nears
2024-11-01 - ConocoPhillips anticipates closing its $17.1 billion acquisition of Marathon Oil before year-end, adding assets in the Eagle Ford, the Bakken and the Permian Basin.
Dividends Declared in the Week of Aug. 19
2024-08-23 - As second-quarter earnings wrap up, here is a selection of dividends declared in the energy industry.
Matador Offers $750 Million in Senior Notes Following Ameredev Deal
2024-09-20 - Matador Resources will offer $750 million in senior notes following the close of its $1.83 billion Ameredev II acquisition.