Exterran, Williams Complete Sale Of Nationalized Venezuela Assets

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
$112.4MM
Description

Acquired El Furrial and PIGAP II assets in Venezuela following nationalization.

Exterran Holdings Inc., Houston, (NYSE: EXH) today announced that WilPro Energy Services (El Furrial) Ltd. and WilPro Energy Services (PIGAP II) Ltd., the joint ventures owned by subsidiaries of Exterran and Williams Cos. (NYSE: WMB), have completed the sale of the El Furrial and PIGAP II assets to Venezuelan national gas company PDVSA Gas SA for approximately $112.4 million in connection with the 2009 nationalization of those assets.

After satisfying amounts owed to the WilPro joint ventures’ lenders and taking into account other closing adjustments, Exterran received an initial payment of approximately $37.6 million in cash at closing. The remaining amount of approximately $74.8 million due to Exterran is payable in periodic cash payments through the first quarter of 2016.

Prior to the nationalization of the El Furrial and PIGAP II assets in 2009, the WilPro joint ventures provided gas compression and injection services to an affiliate of Petroleos de Venezuela, SA (PDVSA). Exterran has a 33.3% ownership interest in WilPro El Furrial and a 30% ownership interest in WilPro PIGAP II. During the first quarter of 2009, Exterran recognized an impairment of approximately $90 million to write off its investment in the WilPro joint ventures.

In connection with the sale of the El Furrial and PIGAP II assets, the WilPro joint ventures and an affiliate of Williams have agreed to suspend their previously filed arbitration proceeding against Venezuela pending payment in full by PDVSA Gas of the purchase price for the nationalized assets.

“We are pleased that the WilPro joint ventures have sold the El Furrial and PIGAP II assets to PDVSA Gas,” said Exterran President and Chief Executive Brad Childers. “We intend to use the initial payment of $37.6 million and the remaining amounts we receive for the repayment of Exterran Holdings’ indebtedness and for general corporate purposes. Also, we expect to recognize as income the initial payment of $37.6 million in the first quarter of 2012, and we expect to recognize as income the remaining $74.8 million as we receive periodic cash payments.”

Exterran’s subsidiary, Universal Compression International Holdings SLU (UCIH), has previously filed a separate arbitration proceeding against Venezuela related to its assets and investments which were nationalized in 2009. The sale of the WilPro joint ventures’ assets has no effect on the separate UCIH claim.