Regency said that the acquisition is expected to increase its existing footprint in the Delaware basin and expands its services to producers into crude and water gathering.
The company expects to finance the acquisition by issuing about $98m of its common units to Hoover Energy.
The remaining consideration will be funded from borrowings under Regency’s revolving credit facility.
Regency reported that the acquisition is estimated to close in the first quarter of 2014, while it is subject to Hart-Scott-Rodino Antitrust Improvements Act approval and other customary closing conditions.
Midstream services of Hoover Energy comprise of crude oil gathering; transportation and terminaling; condensate handling; natural gas gathering; treating; processing; and water gathering and disposal services.
The Perry Ranch station is a major destination for crude collected by a customer in the region and is supported by a 20-year dedication, Regency said.
Regency executive vice president and chief commercial officer Jim Holotik said, "This acquisition further extends Regency’s presence in the Delaware Basin in West Texas and supports our goal of diversifying our service offerings to our customers by adding crude and water gathering services."
"Hoover’s geographic footprint enhances our existing Permian Basin service capabilities and expands our strategic presence in the developing Bone Spring, Wolfcamp and Wolfbone producing areas," Holotik added.
