Targa Resources has agreed to acquire Lucid Energy Delaware, a midstream company, from Riverstone and Goldman Sachs Asset Management in an all-cash deal worth $3.55bn.
In this regard, Targa Resources and Lucid Energy Group, a natural gas processor in the Permian Basin, have announced a definitive agreement.
Targa Resources will make the acquisition through a fully-owned subsidiary.
Operating in the Delaware Basin, Lucid Energy offers natural gas gathering, treating, and processing services. These include nearly 1,689km of natural gas pipelines and around 1.4 billion cubic feet per day (Bcf/d) of cryogenic natural gas processing capacity, in service or under construction.
The company’s midstream assets are mainly located in Eddy and Lea counties in New Mexico. Vast majority of the assets are said to have been built within the last five years.
Lucid Energy CEO Mike Latchem said: “Over the past several years, Lucid has firmly established itself as a leading midstream processor in the Delaware Basin, with a talented team, sophisticated operations and infrastructure, and strong customer partnerships.
“I am immensely proud of what we have achieved, as today’s transaction is a testament to the commitment and expertise of our team members and our strategy of growing the business for the benefit of all stakeholders.”
For Targa Resources, the acquisition adds a complementary and highly strategic gathering and processing system in the Delaware Basin. The transaction also enlarges the size and scale of the publicly-listed midstream infrastructure company in the resource play.
Targa Resources CEO Matt Meloy said: “Lucid’s management team has developed an attractive position in the Delaware Basin and we look forward to continuing to provide value added services to the producer customers.
“This is an exciting acquisition that aligns with our integrated strategy as we are expanding and diversifying our Permian Basin footprint with Lucid’s complementary presence at an attractive investment multiple that we expect will further enhance the creation of shareholder value and continue to drive more volumes through Targa’s downstream businesses.”
The deal, which is subject to regulatory approvals and other customary closing conditions, is anticipated to close in Q3 2022.
Earlier this year, Targa Resources signed a deal to sell its 25% stake in the Gulf Coast Express (GCX) pipeline for $857m.
