BRENTWOOD, Tenn., April 11,
2022 /PRNewswire/ -- Delek Logistics Partners, LP
(NYSE: DKL) announced today that one of its subsidiaries has signed
a definitive purchase agreement for the acquisition of 100% of the
equity interests of 3Bear Delaware Holding – NM, LLC, an indirect
subsidiary of 3Bear Energy, LLC ("3Bear"), related to 3Bear's crude
oil and gas gathering, processing and transportation businesses, as
well as water disposal and recycling operations in the Delaware Basin in New Mexico, for cash consideration
of $624.7 million, subject to customary closing adjustments.
Delek Logistics is executing the transaction through a newly
formed, wholly owned subsidiary, DKL Delaware Gathering, LLC. The
acquisition is expected to result in an investment multiple of
approximately 6.25 times 2023 EBITDA.
3Bear is a premier crude, gas and water gathering, processing
and disposal business in the Northern
Delaware Basin. 3Bear's assets are anchored by ~350,000
dedicated acres and long-term fixed fee contracts. The asset base
includes approximately 485 miles of pipelines, 88 million cubic
feet per day of cryogenic natural gas processing capacity, 120 MBbl
of crude storage capacity and 200 MBbl/d of water disposal
capacity.
Through this strategic transaction, Delek Logistics
significantly enhances its third party revenue and further
diversifies its customer and product mix, expands its footprint
into the Delaware basin, provides
immediate accretion to Distributable Cash Flow, and bolsters ESG
optionality through carbon capture opportunities and GHG reduction
projects currently underway.
Uzi Yemin, Chairman, President
and Chief Executive Officer of Delek Logistics General Partner
stated, "We are pleased to announce the acquisition of 3Bear. The
3Bear management team has developed strong producer relationships
and a world-class asset base in the heart of the Delaware
Basin. We are excited to expand our operations in one of the most
prolific oil and gas producing basins, providing long-term growth
that is highly complementary to Delek Logistics' current asset
footprint."
Mr. Yemin continued, "We are witnessing significant growth in
our existing Permian Gathering system where average daily volumes
have increased from 83 MBbl/d in the fourth quarter of 2021 to
approximately 135 MBbl/d exiting the first quarter of 2022 (last
7-day average of quarter)(1). This level of growth and
demand from producers provides us with confidence to move forward
with this transaction."
This transaction is expected to be completed around mid-year
2022, subject to customary regulatory approvals. We expect to fund
the transaction primarily with existing credit facilities and debt
financing.
Advisors
RBC Capital Markets is serving as financial
advisor and Baker Botts is serving as legal advisor to Delek
Logistics on the transaction.
Tudor, Pickering, Holt & Co. is serving as financial advisor
and Vinson & Elkins is serving as legal advisor to 3Bear on the
transaction.
(1)
|
Represents the
unaudited average throughputs for our Permian Gathering System for
the last seven days of March 2022. Such volumes are not necessarily
indicative of expected first quarter 2022 average throughputs, and
may not be indicative of the second quarter 2022 average
throughputs.
|
About Delek Logistics Partners, LP
Delek Logistics
Partners, LP, headquartered in Brentwood,
Tennessee, was formed by Delek US Holdings, Inc. (NYSE: DK)
("Delek US") to own, operate, acquire and construct crude oil and
refined products logistics and marketing assets.
Safe Harbor Provisions Regarding Forward-Looking
Statements
This press release contains forward-looking
statements that are based upon current expectations and involve a
number of risks and uncertainties. Statements concerning current
estimates, expectations and projections about future results,
performance, prospects, opportunities, plans, actions and events
and other statements, concerns, or matters that are not historical
facts are "forward-looking statements," as that term is defined
under the federal securities laws. Investors are cautioned that
important factors may affect these forward-looking statements, as
described in Delek US's and Delek Logistics' filings with the SEC,
including risks disclosed in their respective Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and other filings and
reports with the SEC. Forward-looking statements should not be read
as a guarantee of future performance or results and will not be
accurate indications of the times at, or by, which such performance
or results will be achieved. Forward-looking information is based
on information available at the time and/or management's good faith
belief with respect to future events, and is subject to risks and
uncertainties that could cause actual performance or results to
differ materially from those expressed in the statements. Neither
Delek US nor Delek Logistics undertakes any obligation to update or
revise any such forward-looking statements to reflect events or
circumstances that occur, or which they become aware of, after the
date hereof, except as required by applicable law or
regulation.
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SOURCE Delek Logistics