Targa to buy Atlas Pipeline and Atlas Energy for $7.7bn

Targa Resources Partners and Targa Resources have agreed to acquire Atlas Pipeline Partners (APL) and Atlas Energy in a transaction valued at around $7.7bn.

The company will acquire Atlas Pipeline Partners for $5.8bn, including $1.8bn of debt as of 30 September 2014.

As part of the agreement, Atlas Energy will spin off some of its non-midstream assets before it is acquired by Targa Resources for $1.869bn.

The Atlas Energy transaction consists of $610m in cash and 10.35 million shares in Targa Resources.

APL owns and operates 17 gas processing plants, 18 gas treating facilities and around 11,200 miles of active intrastate gas gathering pipeline in Oklahoma, southern Kansas, Texas and Tennessee.

The agreements create a new midstream franchise with increased scale and geographic diversity in important producing basins in the US.

The acquisitions, which are expected to be completed in the first quarter of 2015, add the Woodford/SCOOP, Mississippi Lime and Eagle Ford and further Permian assets to Targa’s existing Permian, Bakken, Barnett and Louisiana Gulf Coast operations.

Targa Resources Partners CEO and general partner Joe Bob Perkins said: "The acquisitions will significantly and immediately increase our scale and geographic diversity, accelerating the growth of our premier North American midstream platform.

"APL’s footprint solidifies the partnership’s position as a leader in the Permian Basin, while adding top-tier assets in the mid-continent and South Texas regions.

"Importantly, the combination of APL’s NGL production with Targa Resources Partners’ leading NGL downstream assets will allow the pro forma partnership to generate additional revenue along the NGL value chain, create additional attractive growth capital expenditure projects and accelerate current growth capital expenditure projects."