NGL Energy Partners LP agreed to divest its water disposal assets in the South Pecos production area for $238.8 million, in an effort to sharpen its focus on its water disposal operations in the Delaware Basin.
The assets to be sold to WaterBridge Resources LLC include nine saltwater disposal facilities; disposal agreements and other contracts related to the facilities; connected pipelines; and disposal permits, all located near Pecos, Texas, in southern Reeves and Ward counties.
The partnership plans to focus its Delaware Basin water disposal operations in northern Reeves, Loving and Winkler counties in Texas; and southern Eddy and Lea counties in New Mexico, near the state-line area between the two states. NGL Energy Partners recently acquired a large acreage position in the area, where it developed disposal facilities and pipeline infrastructure, according to a Dec. 20 news release.
Proceeds from the deal would be used to pay down debt, boost liquidity and improve the partnership's leverage ratio to under 3.0 times by fiscal year-end, in keeping with a "self-funding model" in pursuing growth.
The deal is scheduled to close within 45 days. Barclays is acting as financial adviser, while McAfee & Taft in Tulsa, Okla., is acting as legal counsel for NGL Energy Partners.