Targa Resources Corp., one of the largest US independent midstream infrastructure companies, has agreed to acquire Lucid Energy, a natural gas gathering and processing services company in the Delaware Basin from US asset managers for $3.55 billion in cash and the transaction will be completed in the third quarter.
Targa is buying the Delaware Basin assets from Riverstone Holdings and Goldman Sachs Asset Management and the deal is the latest in a stream of mergers and acquisitions activity for US shale and energy assets.
A statement said privately-held Lucid’s Delaware Basin footprint overlays some of the most economic crude oil and natural gas producing acreage in North America.
Current rig activity supports over 20 years of drilling inventory on Lucid’s more than 600,000 dedicated acres, which are further supplemented by significant volumes subject to minimum volume commitments.
“Lucid’s assets are anchored by long-term, fixed-fee contracts and acreage dedications from a diverse set of high-quality customers. Approximately 70 percent of current system volumes are sourced from investment-grade producers,” added the statement.
“Targa has available liquidity, including cash on hand, its existing $2.75Bln revolving credit facility, and committed debt financing to fund the acquisition,” explained the statement.
Lucid also has about 1.4 billion cubic feet per day of cryogenic natural gas processing capacity in service or under construction located primarily in Eddy and Lea counties of New Mexico.
