Energy Transfer Lp said on Monday that it would acquire pipeline operator Lotus Midstream in a USD 1.45 billion cash-and-stock deal to boost its pipeline portfolio in the U.S. Permian basin.
Energy Transfer said it will pay USD 900 million in cash and the rest in 44.5 million newly issued shares. Its shares rose 1.03% in premarket trading.
The company said the deal, expected to close in the second quarter of 2023, will immediately add to its free cash flow and distributable cash flow per unit.
Energy Transfer said the pipelines, with a capacity of nearly 1.5 million barrels per day, cover major production areas of the Permian and will add 3,000 miles of crude gathering and transportation pipelines to its network.
The deal will raise Energy Transfer’s storage capacity in Midland, Texas by 2 million barrels, the company said.
The deal also includes a 5% equity interest in the Wink to Webster Pipeline, a 650-mile system that transports more than one million barrels of crude oil and condensate per day from the Permian Basin to the Gulf Coast.
