Rose Rock Midstream LP (NYSE: RRMS) said Feb. 9 that it entered an agreement to acquire the remaining crude oil assets of its general partner, SemGroup Corp. (NYSE: SEMG).
These include the Wattenberg oil trunk line system and SemGroup's 50% interest in the Glass Mountain Pipeline.
The purchase price is $325 million, consisting of cash and 1.75 million common units of Rose Rock, the company said.
The acquisition is scheduled to close in 2015’s first quarter, the company added.
Glass Mountain is a 210-mile crude oil pipeline system comprised of two lateral pipelines originating in the Granite Wash and Mississippi Lime plays. Their current capacity is 140,000 barrels per day, and they join and then terminate in Cushing, Okla.
The Wattenberg oil trunk line system is a 75-mile crude oil pipeline in the D-J Basin, transporting Noble Energy’s oil from to the White Cliffs Pipeline. The system includes a 38-mile extension that came online Feb. 1, the company added.
The acquisition agreement’s terms were approved by the conflicts committee of SemGroup’s board of directors. Simmons & Co. International was the committee’s financial adviser. Akin Gump Strauss Hauer & Feld LLP was its legal adviser.
"We have been working toward this agreement for some time now, and we are pleased to have reached this important milestone for both Rose Rock and SemGroup," said Carlin Conner, president and CEO of SemGroup.
"The transaction strengthens and diversifies Rose Rock's asset base while immediately increasing distributable cash flow on a per unit basis. In addition, this transaction underscores SemGroup's focus on value creation and advances our efforts to drop down assets to enhance returns and increase dividends for stockholders. We remain committed to dropping down SemGroup's U.S. gas assets in the near future," he added.
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