Enterprise to Sell Offshore Gulf of Mexico Business to Genesis
July 16 2015 - 5:32AM
Business Wire
Enterprise Products Partners L.P. (NYSE:EPD) today announced
that it has executed definitive agreements to sell its offshore
Gulf of Mexico pipelines and services business, which primarily
consists of its Offshore Pipelines & Services business segment
to Genesis Energy, L.P. (“Genesis”) for approximately $1.5 billion
in cash. The transaction is expected to close during the third
quarter of 2015. Enterprise’s offshore assets include its ownership
interest in nine crude oil pipeline systems with more than 1,100
miles of pipeline; nine natural gas pipeline systems totaling
approximately 1,200 miles of pipeline; and its ownership interest
in six offshore hub platforms.
“We are pleased to execute this agreement to sell our offshore
Gulf of Mexico business to Genesis,” said Michael A. Creel, chief
executive officer for Enterprise’s general partner. “In recent
years, earnings from our offshore business represented only three
percent of Enterprise’s gross operating margin, and our offshore
assets do not effectively integrate with our downstream crude oil
and natural gas pipeline systems. We plan to redeploy proceeds from
this sale into attractive growth opportunities that would extend
and expand our integrated midstream system and should generate
higher risk-adjusted returns on capital, such as acquisitions and
organic projects in the Eagle Ford and Permian shale plays. In
addition to enhancing our overall financial flexibility, the
proceeds from this sale will effectively provide funds to finance
the first installment of our recent acquisition of EFS Midstream
LLC in the Eagle Ford and, furthermore, eliminates our need for
equity capital for the remainder of 2015 based on our current
expectations.”
“I cannot think of a better owner for the future development of
these assets than Genesis. For over twenty years, Grant Sims, the
chief executive officer of Genesis, has been a pioneer and a
visionary in the development of midstream energy infrastructure in
the Gulf of Mexico. These assets should be very complementary to
Genesis’ existing offshore investments. Furthermore we would like
to thank the Enterprise employees who will join Genesis in this
transaction. These employees have built and operated award-winning
offshore assets such as the Independence Hub platform and Trail
pipeline and the Poseidon, Cameron Highway, Shenzi and Southeast
Keathley Canyon crude oil pipelines in a safe and efficient
manner,” stated Creel.
Enterprise expects to record non-cash asset impairment and
related charges of approximately $100 million, or $0.05 per common
unit on a fully-diluted basis in connection with the sale of its
offshore Gulf of Mexico pipelines and services business. Since
these assets were viewed as held-for-sale at June 30, 2015, these
non-cash charges will be reflected in Enterprise’s consolidated
results for the three and six months ended June 30, 2015.
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. Our
services include: natural gas gathering, treating, processing,
transportation and storage; NGL transportation, fractionation,
storage and import and export terminals; crude oil and refined
products transportation, storage and terminals; petrochemical
transportation and services; and a marine transportation business
that operates primarily on the United States inland and
Intracoastal Waterway systems. The partnership’s assets include
approximately 49,000 miles of onshore pipelines; 225 million
barrels of storage capacity for NGLs, crude oil, refined products
and petrochemicals; and 14 billion cubic feet of natural gas
storage capacity.
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: http://www.businesswire.com/news/home/20150716005515/en/
Enterprise Products Partners L.P.Randy Burkhalter, (713)
381-6812Investor RelationsorRick Rainey, (713) 381-3635Media
Relations
Enterprise Products Part... (NYSE:EPD)
Historical Stock Chart
From Apr 2024 to May 2024
Enterprise Products Part... (NYSE:EPD)
Historical Stock Chart
From May 2023 to May 2024