Under the terms of the agreement, QEP Field will sell its midstream business, including ownership stake in QEP Midstream Partners (QEPM) to Tesoro for $2.5bn, including $230m to refinance debt at QEPM.
Upon completion of the transaction, QEP Resources will retain its ownership of Field Services’ Haynesville Gathering System.
Scheduled to be closed before year-end 2014, the transaction is subject to regulatory approvals.
The sale is a part of QEP Resources’ ongoing review of strategic alternatives to enhance shareholder value.
QEP Resources chairman, president and CEO Chuck Stanley said: "This transaction allows us to maximize shareholder value by deploying proceeds from the sale through multiple avenues, including returning capital to shareholders, reducing debt, and improving our competitive position through increased capital investment in our premier E&P assets.
"Post-closing, QEP will emerge as a more competitive and financially strong independent E&P company with assets in two of North America’s most prolific crude oil provinces, the Williston and Permian Basins, and low-cost, high quality natural gas properties in the Rocky Mountains and in northwest Louisiana.
"The sale of our midstream business is a significant milestone in the strategic repositioning of our company, as we believe QEP will be better positioned to deliver continued growth in production and Adjusted EBITDA in 2015 and beyond."
