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
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 Regencys
position as a midstream provider in the Mid-Continent
region, CEO Mike Bradley said in the statement.
The deal with Eagle Rock augments Regencys $3.88
billion acquisition of PVR Partners in October, Bradley
That purchase boosted Regencys 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 Permians Delaware Basin.