EnLink Midstream Partners, LP (NYSE: ENLK) (the Partnership)
today announced that it has acquired the remaining 25 percent
equity interest in EnLink Midstream Holdings, LP (EMH) from
EnLink Midstream, LLC (NYSE: ENLC) (the General Partner)
(collectively, EnLink Midstream) for approximately $900 million of
newly issued Partnership common units. The Partnership now holds
100 percent of EMH, which owns the assets that Devon Energy Corp.
(Devon) contributed to EnLink Midstream in March 2014. These assets
include gathering and processing systems in North Texas and
Oklahoma, which are supported by long-term, fixed-fee contracts
with minimum volume commitments, as well as an economic interest in
Gulf Coast Fractionators located in Mont Belvieu, Texas.
The acquisition is immediately accretive to distributable cash
flow per common unit of the Partnership, with the transaction value
representing an approximate nine times multiple of estimated
adjusted EBITDA of EMH for 2015.
“The completion of this dropdown marks an important milestone in
EnLink Midstream’s strategic growth plan,” said Barry E. Davis,
EnLink Midstream President and Chief Executive Officer.
“As the final dropdown of Devon’s legacy assets from the
General Partner to the Partnership, this transaction enables us to
achieve our stated goal of creating a pure-play general partner.
The transaction also consolidates Devon’s legacy assets under the
ownership of the Partnership, which supports long-term growth in
Partnership distributions and further reduces the leverage of the
Partnership.”
The transaction has been approved by the board of directors of
the managing member of the General Partner and by the board of
directors of the general partner of the Partnership, as well as by
the conflicts committee of the board of directors of the general
partner of the Partnership. The conflicts committee, which is
composed entirely of independent directors, engaged Simmons &
Company International to act as its independent financial advisor
and to render a fairness opinion, and Morris, Nichols, Arsht
& Tunnell LLP to act as its independent legal counsel.
About the EnLink Midstream Companies
EnLink Midstream is a leading, integrated midstream company with
a diverse geographic footprint and a strong financial foundation,
delivering tailored customer solutions for sustainable growth.
EnLink Midstream is publicly traded through two entities: EnLink
Midstream, LLC (NYSE: ENLC), the publicly traded general partner
entity, and EnLink Midstream Partners, LP (NYSE: ENLK), the master
limited partnership.
EnLink Midstream’s assets are located in many of North America’s
premier oil and gas regions, including the Barnett Shale, Permian
Basin, Cana-Woodford Shale, Arkoma-Woodford Shale, Eagle Ford
Shale, Haynesville Shale, Gulf Coast region, Utica Shale and
Marcellus Shale. Based in Dallas, Texas, EnLink Midstream’s assets
include over 9,100 miles of gathering and transportation pipelines,
16 processing plants with 3.6 billion cubic feet per day of
processing capacity, seven fractionators with 280,000 barrels per
day of fractionation capacity, as well as barge and rail terminals,
product storage facilities, purchase and marketing capabilities,
brine disposal wells, an extensive crude oil trucking fleet and
equity investments in certain private midstream companies.
Additional information about the EnLink Midstream companies can
be found at www.EnLink.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. These statements are
based on certain assumptions made by the Partnership and the
General Partner based upon management's experience and perception
of historical trends, current conditions, expected future
developments and other factors the Partnership and the General
Partner believe are appropriate in the circumstances. These
statements include, but are not limited to, statements with respect
to adjusted EBITDA of EMH, distributable cash flow, expected
performance of the EMH assets, future financial performance of our
assets, demand for our services and the underlying commodities,
forecasts regarding capacity, incremental investment, project costs
and timing for completing the projects described herein, changes in
laws applicable to us and our businesses, as well as the
Partnership's and the General Partner’s future growth and results
of operations. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
control of the Partnership and the General Partner, which may cause
the Partnership's and the General Partner’s actual results to
differ materially from those implied or expressed by the
forward-looking statements. These risks include, but are not
limited to, risks discussed in the Partnership's and the General
Partner’s filings with the Securities and Exchange Commission. The
Partnership and the General Partner assume no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise.
Non-GAAP Financial Information
This press release contains non-generally accepted accounting
principle financial measures that we refer to as adjusted EBITDA of
EMH and distributable cash flow. We define adjusted EBITDA of EMH
as earnings plus depreciation, provisions for income taxes and
distribution of equity investment less income on equity investment.
We define distributable cash flow as net cash provided by operating
activities plus adjusted EBITDA, net to the Partnership less
interest expense, interest rate swap, cash taxes and other,
maintenance capital expenditures and Predecessor adjusted
EBITDA.
The amounts included in the calculation of these measures are
computed in accordance with generally accepted accounting
principles (GAAP) with the exception of maintenance capital
expenditures. Maintenance capital expenditures are capital
expenditures made to replace partially or fully depreciated assets
in order to maintain the existing operating capacity of the assets
and to extend their useful lives.
The Partnership and General Partner believe these measures are
useful to investors because they may provide users of this
financial information with a meaningful comparison between current
results and prior-reported results and a meaningful measure of
EMH’s, the Partnership’s and the General Partner's cash flow after
satisfaction of the capital and related requirements of their
respective operations.
Adjusted EBITDA of EMH and distributable cash flow, as defined
above, are not measures of financial performance or liquidity under
GAAP. They should not be considered in isolation or as an indicator
of the Partnership’s and the General Partner's performance.
Furthermore, they should not be seen as a measure of liquidity or a
substitute for metrics prepared in accordance with GAAP.
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version on businesswire.com: http://www.businesswire.com/news/home/20150527006590/en/
EnLink MidstreamJill McMillan, 214-721-9271Vice
President of Communications and Investor
RelationsJill.McMillan@enlink.com
EnLink Midstream Partners, LP (NYSE:ENLK)
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