Energy infrastructure company Archrock said on July 22 it would buy contract gas compression services provider Total Operations and Production Services (TOPS) for about $983 million in cash and stock from Apollo Global Management funds.
The acquisition will increase Archrock's Permian Basin compression capacity by 30% to nearly 2.2 million operating horsepower and its Permian-based assets will represent more than half of its total operating horsepower.
The transaction comes as dealmaking in the Permian shale basin, the largest U.S. oilfield that straddles West Texas and New Mexico, has extended to this year after a bumper 2023.
"The transaction is expected to be more than 10% accretive to earnings per share and more than 20% accretive to cash available for dividend per share in 2025," Archrock CEO Brad Childers said in a statement.
Houston, Texas-based Archrock will issue 6.87 million new shares to TOPS, and will fund the $826 million cash portion with a combination of equity and debt.
Archrock's shares were down 6.9% in extended trading.
The deal is expected to close by the end of 2024.
Recommended Reading
Exclusive: Permian’s Relevance in US Oil Production Expected to Increase
2024-11-26 - Jefferies’ Pete Bowden, the global head of industrial, energy and infrastructure investing, discussed the trajectory of the Permian Basin’s production and the future of M&A in the increasingly consolidated region, in this Hart Energy Exclusive interview.
Japan’s Toyo to Buy Houston Area Solar Production Facility
2024-11-26 - Toyo says it plans to start production of 1 GW of annual module capacity by mid-2025 and reach 2.5 GW by the end of 2025.
Midstreamers Say Need for More Permian NatGas Pipelines Inevitable
2024-11-26 - The Permian Basin’s associated gas output could outstrip the region’s planned capacity well before the end of the decade, pipeline company executives said.
New Fortress Makes Headway on $2.7B Debt Refinancing
2024-11-26 - New Fortress Energy Inc. anticipates raising approximately $325 million in gross proceeds through the refinancing.
Equinor Exercises Option for Three Havila Vessels
2024-11-26 - Equinor ASA uses the vessels to support its North Atlantic, North Sea platforms.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.