NGL Energy Partners (NYSE: NGL) bulks up midstream offering with $693 million buy

Atlanta, GA 5/21/12 (StreetBeat) – NGL Energy Partners LP (NYSE: NGL) said it will buy equity interests in High Sierra Energy LP and its general partner for $693 million to add crude oil transportation and water treatment services to its offering.

NGL Energy Partners will pay about $433 million in common units and $150 million in cash for equity interests in the High Sierra entities, the company said in a statement.

High Sierra Energy's crude oil segment handles about 50,000 barrels (bbls) per day of crude and controls 32 pipeline injection facilities and three crude oil terminals.

Surging oil and gas production in the U.S. is creating a scramble for infrastructure to get supplies to refining hubs. The explosive growth of domestic crude oil plays like those in the Eagle Ford Shale are feeding the trend.

"With our combined fleet ... we will be a full service midstream solution for gas plant and fractionation operators, crude oil producers, refiners and retailers across the country," NGL CEO H. Michael Krimbill said in a statement.

Denver, Colorado-based High Sierra's water services segment handles over 80,000 bbls of water per day.

There is sturdy demand for water treatment services with state regulators asking oil and gas drillers to improve the treatment of harmful waste water from their operations.

NGL expects to recommend an increase in its annual distribution to $1.65 per share from $1.45 for the quarter ended June 30, when the deal would have likely closed.

Robert W Baird & Co Inc served as the financial advisor to NGL Energy Partners on the deal.

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