Atlas Pipeline announces sale of Elk City facility

Atlas Pipeline Partners, L.P. announced it has entered into a definitive agreement to sell its Elk City facilities to Enbridge Energy Partners, L.P. for US$ 682 million. Upon completion of the transaction, Atlas Pipeline will pay-off its US$ 422 million secured term loan and repay approximately US$ 250 million of its revolving credit facility, leaving an anticipated US$ 340 million of liquidity under this line and an outstanding balance of approximately US$ 40 million. The transaction is expected to close in the third or fourth quarter of 2010.

The purchase will include 800 miles of pipelines and four gas processing plants in southwestern Oklahoma and the Texas Panhandle.

"Over the past several quarters, APL's management team has communicated that it was evaluating strategies that would improve the Partnership's balance sheet, grow its strategic asset base, and allow for the resumption of distributions to our unit holders. We believe this transaction accomplishes all those objectives and provides a balanced approach to debt reduction. The transaction provides significant upside for growth, particularly in our Laurel Mountain Midstream asset in the Marcellus Shale," stated Eugene Dubay, the Partnership's Chief Executive Officer.

Enbridge Energy has said it will integrate the Elk City facility into it’s 1800 mile Anadarko system in the same area. "Strategically, this acquisition provides immediate synergies with our existing natural gas gathering assets and further solidifies Enbridge's ability to capitalize on growth in the Granite Wash," said Patrick D. Daniel, President and Chief Executive Office. The Granite Wash is a 50 year old field where producers have been drawing gas liquids and oil; the facilities that Enbridge are buying are capable of processing gas liquids.

Upon completion of the transaction, and based on current commodity prices, the Partnership believes it can achieve EBITDA between US$ 160 million and US$ 200 million in 2011; or distributable cash flow between US$ 1.80 and US$ 2.60 per unit. Further, based on considerable organic growth opportunities, Atlas Pipeline believes it can significantly grow its EBITDA over the next several years in excess of US$ 350 million in 2014.

Read the article online at: https://www.worldpipelines.com/business-news/29072010/atlas_pipeline_announces_sale_of_elk_city_facility/