Targa Resources’ $1.6 Billion sale of 45% Interest in Bakken Assets

Evercore is serving as Targa’s exclusive financial advisor and Vinson and Elkins LLP is acting as Targa’s legal counsel on the Transaction. Citi is serving as Blackstone’s exclusive financial advisor and Akin Gump Strauss Hauer & Feld LLP is acting as Blackstone’s legal counsel on the Transaction

Targa Resources Corp. (NYSE: TRGP) has entered into definitive agreements to sell a 45 percent interest in Targa Badlands LLC, the entity that holds all of Targa’s assets in North Dakota, to funds managed by GSO Capital Partners and Blackstone Tactical Opportunities for $1.6 billion in cash.

Under the terms of the executed agreements, Targa will continue to be the operator and will hold majority governance rights in Badlands. Future growth capital is expected to be funded on a pro rata basis. Badlands will pay a minimum quarterly distribution to Blackstone and to Targa based on their initial investments, and Blackstone’s capital contributions will have a liquidation preference upon a sale of Badlands.

The Badlands assets and operations are located in the Bakken and Three Forks Shale plays of the Williston Basin in North Dakota and include approximately 480 miles of crude oil gathering pipelines, 125,000 barrels of operational crude oil storage, approximately 260 miles of natural gas gathering pipelines and the Little Missouri natural gas processing plant with a current gross processing capacity of approximately 90 million cubic feet per day (“MMcf/d”). Additionally, Badlands owns a 50% interest in the 200 MMcf/d Little Missouri 4 (“LM4”) Plant that is anticipated to be completed in the second quarter of 2019.

Vinson and Elkins advised Targa with a team led by partner Christopher Collins (Picture), with assistance from senior associate Jeannie Poland and associate Bo Shi. Also advising were partners Caroline Blitzer Phillips, Darin Schultz, Neil Imus and Darren Tucker, counsel Ryan Hunsaker, Larry Pechacek and Dan Spelkin and associates Alex Cross, Brittany Smith, Jordan Fossee and Farah Chranya. Tax advice was provided by partners James Meyer and Ryan Carney, with assistance from Brian Russell and Neil Clausen.

Involved fees earner: Jeannie Poland – Kirkland & Ellis; Christopher Collins – Vinson & Elkins LLP; Bo Shi – Vinson & Elkins LLP;

Law Firms: Kirkland & Ellis; Vinson & Elkins LLP;

Clients: Targa Resources Corp.;

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Author: Ambrogio Visconti