Dallas-based Regency Energy Partners LP and PVR Partners LP reported that their respective boards have approved a definitive merger agreement in which Regency will acquire PVR for $5.6 billion, which includes the assumption of $1.8 billion of net debt.
The transaction, which is expected to close during first-quarter 2014, enables Regency to create a gas gathering and processing platform with an increased presence in plays in Appalachia, West Texas, South Texas, the Midcontinent, and North Louisiana, namely the Marcellus and Utica shales.
Michael J. Bradley will continue as president and chief executive officer and Thomas E. Long will continue as executive vice-president and chief financial officer of the combined company.
Before the merger, Regency had existing assets in the Wolfcamp, Bone Springs, Avalon, and Cline shale plays in the Permian basin (OGJ Online, June 24, 2011), the Eagle Ford shale play in South Texas (OGJ Online, Dec. 14, 2010), the aforementioned Marcellus and Utica shale plays in Appalachia, the Granite Wash play in Oklahoma and Texas, and the Haynesville shale (OGJ Online, Nov. 25, 2009) and Cotton Valley formation in North Louisiana.
In February, Regency reported it would purchase Southern Union Gathering Co. LLC, owner of Southern Union Gas Services Ltd., from Southern Union Co., a jointly owned affiliate of Energy Transfer Equity LP and Energy Transfer Partners, for $1.5 billion. The transaction expanded Regency’s presence in the Permian basin (OGJ Online, June 3, 2013).
In 2011, Regency and Dallas-based Energy Transfer Partners LP jointly acquired LDH Energy Asset Holdings LLC from Louis Dreyfus Highbridge Energy LLC for $1.925 billion, of which Regency contributed $578 million for a 30% interest. The transaction gave the companies control of LDH’s NGL storage, fractionation, and transportation operations, including the 1,066-mile, 144,000-b/d intrastate West Texas pipeline that transports NGLs from the Permian basin through the Barnett shale production area and terminates at Mont Belvieu storage and fractionation (OGJ Online, March 23, 2011).