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NGL Energy Partners LP Announces Merger With High Sierra Energy LP

Stocks in this article: NGL

NGL Energy Partners LP (NYSE: NGL) today announced the signing of merger agreements with High Sierra Energy LP and High Sierra Energy GP, LLC (its general partner). NGL will exchange common units and contribute cash for the equity interests in the High Sierra entities. The combined consideration for the HSE entities is $693 million less assumed net debt. Based upon the expected outstanding indebtedness of the HSE entities as of closing, the equity portion is expected to be approximately $433 million and the cash portion will be approximately $150 million. Closing is anticipated in early June upon satisfaction of certain conditions including approval of the merger by requisite HSE unitholders and expiration of the Hart Scott Rodino waiting period.

High Sierra Energy is a Denver, Colorado based limited partnership with three core business segments: crude oil gathering, transportation and marketing; water treatment, disposal, recycling and transportation; and natural gas liquids transportation and marketing. The crude oil segment handles approximately 50,000 bbls/day of crude and controls 32 pipeline injection facilities, three crude oil terminals (two of which provide barge service) and approximately 90 tractor-trailers. The water services segment handles over 80,000 bbls of water/day through a 60,000 bbls/day recycling plant located in the Pinedale Anticline of Wyoming; 7 disposal plants (two of which include treating and recycling facilities) located in the Niobrara crude oil play in the DJ Basin; and a transportation and frac tank rental operation with 50 tractor trailers located within the Mississippian Lime crude oil play in Oklahoma and Kansas. The natural gas liquids transportation and marketing segment leases over 2,000 rail cars, owns 6 transloaders and leases 4 rail sites to move approximately 45,000 bbls/day of natural gas liquids from coast to coast.

“Combining NGL and High Sierra creates a dynamic and diversified mid-cap MLP that will provide multiple services to upstream customers including water treatment and transportation, crude oil gathering, transportation and marketing as well as natural gas liquids transportation and marketing,” said H. Michael Krimbill, CEO of NGL. “With our combined fleet of more than 3,000 rail cars, 18 natural gas liquids terminals from coast to coast, 3 crude oil terminals, over 90 trucks, a substantial wholesale marketing and supply network plus retail demand in excess of 140 million gallons of propane annually, we will be a full service midstream solution for gas plant and fractionation operators, crude oil producers, refiners and retailers across the country.”

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