QEP Resources Inc. plans to form a master limited partnership (MLP) to support the growth of its midstream business and expects to raise $300-400 million in gross proceeds by selling a minority interest in the MLP, the Denver-based exploration and production (E&P) company said.
QEP said it expects to initially contribute a majority of its gathering assets in Wyoming and North Dakota to the MLP. Proceeds from the offering would be used to fund operations, repay debt under the company’s credit facility and for general corporate purposes.
“The MLP is intended to support the growth of QEP’s midstream business and is consistent with the company’s focus on maximizing shareholder value and maintaining balance sheet strength,” QEP said.
QEP was spun off by Questar Corp. in 2010 (see Daily GPI, May 19, 2010). The independent natural gas and crude oil E&P company is focused on the northern (primarily in the Rockies and the Williston Basin) and southern (primarily Oklahoma, Louisiana and the Texas Panhandle) regions of the United States.
The company bought and sold 641.8 TBtu in 2011, a 46.6% increase compared with 437.7 TBtu in 2010, according to an analysis by Natural Gas Intelligence (NGI) of 2011 Form 552 filings with the Federal Energy Regulatory Commission (see Daily GPI, May 30, 2012).
Independent E&P operators in the United States, which have faced a funding dilemma since they began rushing into unconventionals, have begun turning to the big private equity lenders (see Daily GPI, Nov. 15, 2012). According to Kohlberg Kravis Roberts & Co. Managing Director Claire Farley, MLPs will be the “largest financier of midstream opportunities” in the coming years.
©Copyright 2013Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |