Enterprise Completes Acquisition of Piñon Midstream

Rhea-AI Summary

Enterprise Products Partners (NYSE: EPD) has completed its acquisition of Piñon Midstream for $950 million in a debt-free cash transaction. The acquisition expands Enterprise's footprint in the eastern Delaware Basin of Texas and New Mexico, adding natural gas gathering and treating services to its portfolio. This strategic move enhances Enterprise's position as a leading North American midstream energy services provider, complementing its extensive infrastructure network that includes over 50,000 miles of pipelines, 300 million barrels of storage capacity, and 14 billion cubic feet of natural gas storage capacity.

Positive

• All-cash acquisition of $950 million with no debt assumption
• Strategic expansion in the Delaware Basin region
• Addition of natural gas gathering and treating assets
• Enhances geographical footprint in key energy production area

Negative

• Significant cash outlay of $950 million impacting immediate liquidity

Insights

Financial Analyst

The $950 million acquisition of Piñon Midstream represents a strategic expansion of EPD's natural gas infrastructure in the Delaware Basin. The debt-free transaction structure is particularly advantageous, preserving EPD's balance sheet strength while expanding operational capabilities. The deal enhances EPD's vertical integration in the region's natural gas value chain, specifically adding gathering and treating services that complement existing midstream operations.

The Delaware Basin remains one of North America's most productive oil and gas regions, making this acquisition well-positioned for long-term value creation. The asset integration should drive operational synergies and provide additional revenue streams through increased capacity and service offerings. With natural gas demand projected to grow, particularly for LNG exports, this strategic positioning in a key production region strengthens EPD's competitive advantage.

Energy Infrastructure Specialist

Piñon Midstream's assets significantly enhance EPD's natural gas treating capabilities in an area known for high H2S content, addressing a critical infrastructure need in the Delaware Basin. The strategic value lies in the specialized treating facilities that process sour gas, which many competitors lack the capability to handle effectively. This acquisition fills a technical gap in EPD's service offering and should drive increased throughput volumes across their integrated system.

The eastern flank of the Delaware Basin continues to see active drilling programs despite commodity price fluctuations, suggesting stable utilization rates for these assets. The treating facilities' strategic location and technical capabilities position EPD to capture additional market share in this growing production region.

HOUSTON--(BUSINESS WIRE)-- Enterprise Products Partners L.P. (NYSE: EPD) (“Enterprise”) today announced that the company has completed its previously announced acquisition of Piñon Midstream, LLC (“Piñon Midstream”), formerly a portfolio company of Black Bay Energy Capital. Enterprise purchased Piñon Midstream for $950 million in cash consideration as part of a debt-free transaction. The acquired assets, which include natural gas gathering and treating services, expand Enterprise’s footprint in the eastern flank of the prolific Delaware Basin of Texas and New Mexico.

Enterprise Products Partners L.P. is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. Services include: natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage and marine terminals; crude oil gathering, transportation, storage and marine terminals; petrochemical and refined products production, transportation, storage, and marine terminals and related services; and a marine transportation business that operates on key U.S. inland and intracoastal waterway systems. The partnership’s assets include more than 50,000 miles of pipelines; over 300 million barrels of storage capacity for NGLs, crude oil, refined products and petrochemicals; and 14 billion cubic feet of natural gas storage capacity. Please visit www.enterpriseproducts.com for more information.

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical fact, included herein that address activities, events, developments or transactions that Enterprise and its general partner expect, believe or anticipate will or may occur in the future are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from expectations, including required approvals by regulatory agencies, the possibility that the anticipated benefits from such activities, events, developments or transactions cannot be fully realized, the possibility that costs or difficulties related thereto will be greater than expected, the impact of competition, and other risk factors included in Enterprise’s reports filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Except as required by law, Enterprise does not intend to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241027732831/en/

Libby Strait, Investor Relations, (713) 381-4754 or (866) 230-0745

Rick Rainey, Media Relations (713) 381-3635

Source: Enterprise Products Partners L.P.

FAQ

How much did Enterprise Products Partners (EPD) pay for Piñon Midstream?

Enterprise Products Partners paid $950 million in cash for Piñon Midstream in a debt-free transaction.

What assets did Enterprise Products Partners (EPD) acquire from Piñon Midstream?

EPD acquired natural gas gathering and treating services assets located in the eastern flank of the Delaware Basin of Texas and New Mexico.

Who was the previous owner of Piñon Midstream before EPD's acquisition?

Piñon Midstream was previously a portfolio company of Black Bay Energy Capital before being acquired by Enterprise Products Partners.

What region does the Piñon Midstream acquisition expand EPD's operations?

The acquisition expands Enterprise's operations in the eastern flank of the Delaware Basin, spanning Texas and New Mexico.