Energy Transfer Bolsters Permian Basin Footprint Via $1.45B Lotus Midstream Deal

Energy Transfer LP ET has agreed to acquire Lotus Midstream Operations, LLC from an affiliate of EnCap Flatrock Midstream (EFM) for ~$1.45 billion.
The consideration consists of $900 million in cash and ~44.5 million newly issued Energy Transfer common units.
Lotus Midstream owns and operates Centurion Pipeline Company LLC, an integrated, crude midstream platform in the Permian Basin.
The acquisition also includes a 5% equity interest in the Wink to Webster Pipeline, a 650-mile pipeline system transporting crude oil and condensate from the Permian Basin to the Gulf Coast.
The acquisition will increase the Partnership’s footprint in the Permian Basin and provide increased connectivity for its crude oil transportation and storage businesses.
Additionally, upon closing, Energy Transfer expects to begin construction on a 30-mile pipeline project to originate barrels from its Midland terminals for ultimate delivery to Cushing.
The company expects the transaction to be immediately accretive to free cash flow, distributable cash flow per unit, and neutral to Energy Transfer’s leverage metrics.
The transaction is expected to close in the second quarter of 2023.
As of December 31, 2022, Energy Transfer revolving credit facility had an aggregate of $4.18 billion of available borrowing capacity.
Price Action: ET shares are trading lower by 0.26% at $11.67 on the last check Monday.