Azure Midstream Energy LP

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
231MM
Description

Sold its share in TGGT for $231 million and a stake in Azure Midstream Energy.

Another $910 Million: Azure Latest Midstream Company To Spend Big By Darren Barbee, Hart Energy

Azure Midstream Energy LP has agreements in place to buy joint-venture company TGGT for $910 million, continuing a string of acquisitions by midstream companies in fourth-quarter 2013.

BG Group and EXCO Resources said Oct. 17 that they will part with their joint-venture midstream company TGGT. BG sold its share for $231 million and a stake in Azure, the company announced.

EXCO said it expects to receive net cash proceeds of approximately $230 million after TGGT pays off its credit agreement, transaction costs and closing adjustments. The cash proceeds will be used to reduce the asset sale tranche under EXCO’s credit agreement.

TGGT is a 50/50 midstream JV formed between BG and EXCO Resources in 2009. It owns and operates natural gas gathering and treating assets for production from the Haynesville, Bossier and Cotton Valley shale gas formations in East Texas and North Louisiana, said Jeff Dietert, managing director, head of research, Simmons & Co. International.

The deal includes $875 million cash with the remainder of the price consisting of 8% equity interest in Azure, split equally between EXCO and BG Group.

“We are pleased to have reached this agreement with Azure and look forward to a long-term relationship in the East Texas and North Louisiana area,” said Douglas H. Miller, EXCO’s chairman and CEO.

BG Group said the sale of its interests in TGGT are aligned with a key strategic commitment to more actively manage its portfolio as the company focuses on its core strengths of exploration, production and LNG.

The deal follows an Oct. 4 proposed merger by Crestwood Midstream Partners LP (NYSE: CMLP), Crestwood Holdings and Inergy Midstream LP (NYSE: NRGY) for $8 billion.

Crestwood also announced Oct. 10 that it is buying Arrow Midstream Holdings LLC for $750 million. Also Oct. 1, Regency Energy Partners LP (NYSE: RGP) said it would buy PVR Partners LP (NYSE: PVR) for $5.6 billion.

EXCO Resources is an oil and natural gas exploration, exploitation, development and production company headquartered in Dallas. Its principal operations are in Texas, North Louisiana and Appalachia.