Targa Resources Corp., Houston, agreed to sell a 45% interest in Targa Badlands LLC, the entity that holds Targa’s North Dakota oil and natural gas assets, to funds managed by GSO Capital Partners and Blackstone Tactical Opportunities for $1.6 billion in cash. Targa will continue to operate and hold majority governance rights.
The Badlands assets and operations, in the Bakken and Three Forks shale plays of the Williston basin, include some 480 miles of oil gathering pipelines, 125,000 bbl of operational oil storage, about 260 miles of gas gathering pipelines, and the Little Missouri gas processing plant with a current gross processing capacity of 90 MMcfd. Additionally, Badlands owns a 50% interest in the 200 MMcfd Little Missouri 4 Plant anticipated to be completed in this year’s second quarter.
Future growth capital is expected to be funded on a pro rata basis. Badlands will pay a minimum quarterly distribution to Blackstone and to Targa based on their initial investments, and Blackstone’s capital contributions will have a liquidation preference upon a sale of Badlands.
Targa expects to use net cash proceeds to pay down debt and for general corporate purposes including funding its growth capital program. The transaction, subject to regulatory approvals and conditions, is expected to close in this year’s second quarter.