Atlas Pipeline to buy Teak Midstream for $1 billion
BY DEBBIE CAI
HOUSTON -- Atlas Pipeline Partners has agreed to acquire Teak Midstream for $1 billion in cash, giving the company an entry point into the liquids rich Eagle Ford Shale in south Texas.
NGP Energy Capital Management (NGP ECM) put Teak up for sale in March. Teak has a long term gathering and processing agreement with Comstock Resources and another undisclosed producer.
Atlas Pipeline CEO Eugene Dubay said Teak's assets are new, highly efficient and are located in the heart of one of the most prolific plays in North America. The assets being acquired include two cryogenic processing plants and 265 miles of high-pressure, rich gas-gathering lines. The deal is expected to close in 2Q.
Atlas Pipeline, which is the midstream subsidiary of Atlas Energy, expects to further expand the acquired Eagle Ford assets beyond 2014, including the potential to add a third processing facility and additional gathering pipelines, among other projects.
Atlas Energy said it expects to receive an additional $25 million to $40 million of annual distributable cash flow in the future, based on the forecasted earnings and cash flow from the Teak assets.
Dow Jones Newswires