Hiland operates crude oil gathering and transportation pipelines and gas gathering and processing systems, which primarily serve production from the Bakken Formation in North Dakota and Montana.
Kinder Morgan chairman and CEO Richard Kinder said: "This transaction establishes a premier midstream platform for us in the Bakken with a significant amount of acreage dedicated under long-term gathering agreements.
"These acreage dedications are with some of the Bakken’s largest and most successful producers, covering some of the most attractive and economically viable areas in the basin.
"We look forward to providing quality midstream services to producers in the Bakken and pursuing incremental growth opportunities in the basin."
Based on its Hiland long-term forecast, Kinder Morgan anticipates that the multiple of EBITDA paid for Hiland, including future growth capital investments, would decline to approximately 10 times by 2018.
Upon completion of the transaction, Kinder Morgan will retain nearly all of Hiland’s approximately 430 employees and will also maintain its already significant presence in Oklahoma.
Hiland serves its customers including Continental Resources, Oasis Petroleum, XTO Energy, Whiting Petroleum, Hess and others.
The company’s crude oil gathering systems feature about 1,225 miles of gathering pipelines.
Image: Hiland’s crude oil gathering systems feature about 1,225 miles of gathering pipelines. Photo: courtesy of supakitmod/Freedigitalphotos.net.
