Enterprise buys Eagle Ford assets: Update
The midstream operator will purchase the interests of partners Pioneer Natural Resources and Reliance Industries in condensate and natural gas pipelines and processing through the south Texas fields. The EFS Midstream venture includes 460 miles of natural gas gathering pipelines, 10 gathering plants, 780mn cubic feet of natural gas treating capacity and 119,000 b/d of condensate stabilization.
Pioneer and Reliance will commit to a 20-year fee-based processing and transportation agreement under the terms of the deal. The companies expect to complete the transaction in the third quarter.
US oil and gas mergers and acquisitions have been slow even though cash inflows for producers have nearly halved from a year ago as the steep fall in oil blurs the outlook for the sector. Other lifelines, such as tapping equity and debt markets, have kept companies afloat, particularly those with sound operations and finances, leading to relatively few distressed asset sales.
In the first quarter, US oil and gas industry mergers slowed to a total of 39 deals worth \\$34.5bn, according to accounting and consulting firm PwC's quarterly study. That compares to 70 deals worth \\$103.5bn in the fourth quarter of 2014, and 60 worth \\$26.4bn in the first quarter 2014.
Midstream deals like the Enterprise purchase made up a large portion of the first quarter transactions, however, with 22 worth \\$29bn, up 47pc in volume and by five-fold in value from a year earlier.
Major corporate deals in the second quarter so far include Noble Energy's \\$3.9bn takeover of Rosetta Resources and Vanguard Natural Resources \\$614mn purchase of Eagle Rock Energy. The biggest global acquisition in the current oil market rout so far has been the \\$70bn Shell acquisition of BG.
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