Targa Resources has agreed to sell a 45% stake in its midstream assets in North Dakota to funds managed by Blackstone units GSO Capital Partners and Blackstone Tactical Opportunities for $1.6 billion in cash.
The assets, held by Targa Badlands, include 480 miles of crude oil gathering pipelines, roughly 260 miles of natural gas gathering pipelines, and 125,000 barrels of operational crude oil storage.
Also included in the assets sold was the Little Missouri gas processing facility, which has gross processing capacity of roughly 90 million cubic feet per day (Mmcf/d).
Badlands also owns a 50% stake in the 200 Mmcf/d Little Missouri 4 plant, which is expected to be online by July 1, Kallanish Energy reports.
“We are delighted to partner with Targa and look forward to building upon the strong operating performance, commercial activity, and customer service capabilities of Badlands,” said GSO senior managing directgor and co-head Michael Zawadzki.
All the assets and operations of Badlands are located in the Bakken and Three Forks Shale plays of the Williston Basin. The midstream assets were acquired by Targa Resources Partners from Saddle Butte Pipeline in December 2012 for $950 million.
The company expects to use the net cash proceeds from the current stake sale in the North Dakota midstream assets to pay down debt and also for general corporate purposes such as funding its growth capital program.
“Selling a minority interest in the Badlands at an attractive valuation allows us to satisfy a substantial portion of our estimated 2019 equity funding needs and provides us with significant flexibility looking forward,” said Targa Resources Ceo Joe Bob Perkins.
The transaction is expected to be completed in the second quarter of 2019.
This post appeared first on Kallanish Energy News.