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Regency Energy buys Texas pipelines, processing facilities for $1 billion

12.24.2013  | 

Regency Energy Partners, a pipeline partnership controlled by Energy Transfer Equity, agreed to buy two midstream units for about $1 billion to expand in Texas, where crude production has surged.

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By JIM POLSON

DALLAS (Bloomberg) -- Regency Energy Partners, a pipeline partnership controlled by Energy Transfer Equity, agreed to buy two midstream units for about $1 billion to expand in Texas, where crude production has surged.

Regency will acquire the pipelines and processing facilities of Eagle Rock Energy Partners for $200 million in stock and $520 million in cash, according to a statement. Separately, Regency said it would pay $290 million for assets belonging to closely held Hoover Energy Partners.

Regency is extending its operations in Texas, where crude oil production has more than doubled since 2009 as companies apply shale-drilling techniques to previously overlooked deposits. Accompanying the oil are natural gas and related liquids that need to be processed by so-called midstream operations.

“Our expanded footprint will strengthen Regency’s position as a midstream provider in the Mid-Continent region,” CEO Mike Bradley said in the statement.

The deal with Eagle Rock augments Regency’s $3.88 billion acquisition of PVR Partners in October, Bradley said.

That purchase boosted Regency’s operations in the Marcellus Shale, the Utica Shale in Ohio and the Granite Wash fields in Texas and Oklahoma.

Regency is acquiring 13,000 km of gathering lines in the Texas Panhandle, East Texas and South Texas from Eagle Rock as well as plants capable of processing 800 MMcfd of natural gas. Hoover gathers and treats oil, gas and water in the southern portion of the Permian’s Delaware Basin.



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