Western Gas Partners has agreed to acquire interests worth $375 million in three gas pipeline companies from global oil and natural gas producer Anadarko.
Under the deal, the Delaware-based master limited partnership will buy a 20 percent interest in each of Texas Express Pipeline LLC and Texas Express Gathering LLC as well as a 33.33 percent interest in Front Range Pipeline LLC from the Woodland, Texas-based company.
The transaction marks Western Gas’ entry into the long-haul natural gas liquids transportation business. “These 100% fee-based assets gather and transport liquids from the Anadarko, Permian, and DJ Basins, all of which are recognized as world class resource plays,” chief executive officer Don Sinclair said in a statement.
Western Gas plans to finance the purchase with the borrowing of $350 million on its revolving credit facility, $6 million of cash on hand, and the issuance of 308,490 common units to Anadarko at an implied price of $60.78 per unit, the statement said.
The firm projects an unlevered internal rate of return of 14 percent to 18 percent for the three projects.
Anadarko was recently in the media spotlight as its shares soared to record highs after market chatter of a potential takeover. A buyer would gain a presence in fields such as the Niobrara formation in Colorado, Texas’ Eagle Ford shale basin, and offshore Africa.