Enterprise To Acquire Interest In Panola NGL Pipeline From Western Midstream In A Debt-Free Transaction For $25M In Cash Consideration
Portfolio Pulse from Happy Mohamed
Enterprise Products Partners L.P. (EPD) is set to acquire a 15% equity interest in Panola Pipeline Company, LLC from Western Midstream Partners, LP (WES) for $25 million in cash. This debt-free transaction will increase EPD's ownership in Panola to up to 70%. The Panola pipeline, spanning 253 miles, transports mixed NGLs from East Texas to various destinations, including EPD's fractionation complex in Chambers County, Texas. The deal, expected to close within 45 days, will be funded through cash and short-term notes.
February 21, 2024 | 9:44 pm
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NEUTRAL IMPACT
Western Midstream Partners, LP (WES) is selling its 15% equity interest in Panola Pipeline to Enterprise Products Partners L.P. for $25 million in cash.
The sale of WES's stake in Panola Pipeline to EPD for $25 million in cash could be seen as a strategic move to streamline its asset portfolio and improve its cash position. The impact on WES's stock price in the short term is uncertain, as the benefits of cash inflow may be offset by the reduction in asset base. The transaction's relevance and importance to WES investors are moderate, given the size of the transaction relative to the company's overall operations.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
Enterprise Products Partners L.P. (EPD) is acquiring a 15% equity interest in Panola Pipeline from Western Midstream for $25 million, increasing its stake to up to 70%.
The acquisition enhances EPD's strategic asset base by increasing its stake in a key pipeline, likely leading to improved operational efficiencies and potential revenue growth. The transaction is expected to be positive for EPD's stock in the short term due to the strategic nature of the acquisition and the use of cash and short-term notes for financing, indicating a strong financial position.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90