Regency Energy Partners LP
Purchased PVR Partners LP for $5.6 billion with focus on Marcellus and Utica plays.
Regency Energy Partners LP (NYSE: RGP) is buying PVR Partners LP (NYSE: PVR), creating a massive presence in the hottest shale plays in North America in a deal for $5.6 billion, the companies announced Oct. 10.
The transaction will create a leading gas gathering and processing platform with a scaled presence across North America's premier high-growth unconventional oil and gas plays in Appalachia, West Texas, South Texas, the Mid-Continent and North Louisiana.
The combined company plans to capitalize on the long-term growth of North American gas production through incremental, high-value expansions around its core asset base as well as other growth and acquisition opportunities.
“This acquisition enhances our overall geographic diversity by providing Regency with a strategic presence in two prolific producing areas, the Marcellus and Utica shales in the Appalachian Basin and the Granite Wash in the Mid-Continent region,” said Michael J. Bradley, Regency’s president and CEO. “These are tremendously complementary businesses, and as a result, we expect the increased footprint and scale to create significant synergies and provide substantial organic growth opportunities that will continue to support our goal of increasing distributions and creating unitholder value.”
The addition of PVR’s asset base in Appalachia and the Mid-Continent region to Regency’s holdings in the Permian Basin, South Texas and North Louisiana will create a diversified, high-growth midstream company. Assets are located in many of the most economic, high-growth unconventional plays in North America, including the Wolfcamp, Bone Springs, Avalon and Cline shale plays in the Permian Basin; the Eagle Ford shale play in South Texas; the Marcellus and Utica shale plays in Appalachia; the Granite Wash play in Oklahoma and Texas; and the Haynesville Shale and Cotton Valley formation in North Louisiana.
The deal, expected to close in the first quarter of 2014, will consist of a unit-for-unit transaction and a one-time cash payment to PVR unitholders presently valued at $5.6 billion, including the assumption of net debt of $1.8 billion.