Plains All American Pipeline, L.P. (NYSE:PAA) Files An 8-K Entry into a Material Definitive Agreement
ITEM 1.01 Entry into a Material Definitive Agreement
ClassA Securities Purchase Agreement and ClassB
Securities Purchase Agreement
On January19, 2017, Plains Pipeline, L.P. (Purchaser), a
Texas limited partnership and a wholly owned subsidiary of Plains
All American Pipeline, L.P. (PAA), entered
into (1)a definitive securities purchase agreement (the
ClassA
Agreement) with COG Operating LLC
(ClassA
Seller), a wholly owned subsidiary of Concho
ResourcesInc. (Concho), to which
Purchaser will acquire all of the outstanding ClassA Units of
Alpha Holding Company, LLC (the Company), the
indirect owner of the Alpha Crude Connector gathering system
located in the Northern Delaware basin, as described in further
detail below, and (2)a definitive securities purchase agreement
(the ClassB
Agreement and, together with the ClassA Agreement,
the Agreements) with
Frontier Midstream Solutions, LLC (ClassB Seller),
to which Purchaser will acquire all of the outstanding ClassB
Units of the Company (collectively, the Acquisition).
Upon the closing of the Acquisition, Purchaser will own all of
the issued and outstanding equity in the Company. The total
consideration for the Acquisition is approximately $1.215 billion
in cash (the Purchase Price),
subject to adjustment based on working capital amounts as of
January1, 2017, and other routine adjustments as provided in more
detail in the ClassA Agreement. A cash deposit of $40 million was
paid to the ClassA Seller upon signing of the ClassA Agreement,
and the balance of the Purchase Price, as allocated between the
ClassA Seller and the ClassB Seller, is payable in cash upon
closing. Subject to clearance under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and other customary closing
conditions, the Acquisition is expected to close in the first
half of 2017. The transactions contemplated by the ClassA
Agreement and the ClassB Agreement are expected to close
contemporaneously. The Agreements include representations,
warranties, covenants, indemnities, remedies, termination and
other customary provisions for a transaction of this nature.
The Company indirectly owns the FERC regulated crude oil
gathering system known as Alpha Crude Connector (the
System) located
in Eddy and Lea Counties, New Mexico and Culberson, Loving and
Winkler Counties, Texas. The System is comprised of 515 miles of
gathering and transmission lines and five market interconnects,
including PAAs Basin Pipeline system at Wink. Following closing,
PAA intends to make three additional interconnects to PAAs
existing Northern Delaware Basin system as well as additional
enhancements intended to increase the system capacity to
approximately 350,000 barrels per day, depending on the level of
volume at each delivery point. The System is supported by acreage
dedications covering approximately 315,000 gross acres, the
majority of which have 10-year terms, and include a significant
acreage dedication from Concho, one of the largest Permian Basin
producers. In addition, a large area of mutual interest agreement
with Concho spans the area immediately around the gathering
system.
ITEM 7.01 Regulation FD
Disclosure
In accordance with General Instruction B.2 of Form8-K, the
information presented under this Item 7.01 shall not be deemed
filed for the purpose of Section18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liabilities of
that section, nor shall such information be deemed incorporated
by reference into any filing under the Securities Act of 1933 or
the Securities Exchange Act of 1934, each as amended.
On January24, 2017, PAA issued a press release announcing the
Acquisition. A copy of the press release is furnished as
Exhibit99.1 hereto.
ITEM 9.01Financial Statements and
Exhibits
(d)Exhibits.
|
Exhibit Number |
|
Description |
|
99.1 |
Press Release dated January24, 2017. |
About Plains All American Pipeline, L.P. (NYSE:PAA)
Plains All American Pipeline, L.P. owns and operates midstream energy infrastructure and provide logistics services for crude oil, natural gas liquids (NGL), natural gas and refined products. The Company operates through three segments: Transportation, Facilities, and Supply and Logistics. Its Transportation segment operations consist of activities associated with transporting crude oil and NGL on pipelines, gathering systems, trucks and barges. Its Facilities segment operations consist of activities associated with providing storage, terminalling and throughput services for crude oil, refined products, NGL and natural gas, as well as NGL fractionation and isomerization services and natural gas and condensate processing services. Its supply and logistics segment operations consist of the merchant-related activities, including sale of gathered and bulk-purchased crude oil, as well as sales of NGL volumes purchased from suppliers and natural gas sales attributable to the activities. Plains All American Pipeline, L.P. (NYSE:PAA) Recent Trading Information
Plains All American Pipeline, L.P. (NYSE:PAA) closed its last trading session down -0.19 at 31.96 with 3,116,987 shares trading hands.