HOUSTON - Easton Energy, a midstream company based in Houston, has agreed to sell its Gulf Coast Liquids Pipeline System to ONEOK , Inc. (NYSE: NYSE:OKE) for $280 million, with adjustments typical for such transactions. While Easton is divesting this asset, it will maintain its natural gas liquids (NGL) and olefins storage operations in Markham, Texas.
The system being sold includes around 450 miles of pipelines that are integral to the NGL and hydrocarbon market in the Texas and Louisiana Gulf Coast region. G.R. Jerry Cardillo, CEO of Easton, emphasized the importance of the pipelines to the Gulf Coast's NGL and hydrocarbon value chain and stated that the sale will benefit customers, shareholders, and business partners alike.
Following the sale, Easton plans to concentrate on its storage business.
Easton is a portfolio company of Dallas-based private equity fund Cresta Fund Management, which oversees more than $1.6 billion in capital. Chris Rozzell, Managing Partner at Cresta, expressed confidence in the value of the pipelines and enthusiasm for Easton's future focus on its storage business.
The storage infrastructure owned by Easton is strategically situated between major NGL and petrochemical markets in Mont Belvieu and Corpus Christi, Texas. This infrastructure boasts brine handling facilities and numerous salt dome wells, providing about 40 million barrels of storage capacity for NGLs and olefins.
The completion of the sale is anticipated for mid-year 2024, pending the satisfaction of standard conditions, including the necessary waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act.
Easton Energy specializes in developing infrastructure that supports the transport, storage, and processing of NGLs, refined products, and petrochemicals. Its primary assets include liquid hydrocarbon salt cavern storage facilities located in Markham, Texas, and a network of distribution pipelines along the Texas and Louisiana Gulf Coast.
This report is based on a press release statement from Easton Energy.
InvestingPro Insights
In light of ONEOK, Inc.'s (NYSE: OKE) acquisition of Easton Energy's Gulf Coast Liquids Pipeline System, investors are closely monitoring the company's financial metrics. As of the first quarter of 2024, ONEOK boasts a robust market capitalization of $46.73 billion. The company's Price/Earnings (P/E) ratio has slightly increased to 19.73, reflecting investor expectations for future earnings growth. Despite a downturn in revenue growth of -16.43% over the last twelve months, ONEOK has demonstrated a quarterly revenue growth of 5.75% in Q1 2024, signaling a potential turnaround.
InvestingPro Tips suggest that ONEOK's Price to Book (P/B) ratio of 2.84 and a dividend yield of 4.95% as of the 134th day of 2024, are metrics of particular interest to investors seeking value and income. The company's commitment to shareholder returns is also evidenced by a dividend growth of 3.66% in the last twelve months. Additionally, the recent price performance has been positive, with a 1-year price total return of 32.81%, closely approaching its 52-week high at 97.86% of the peak value.
For investors seeking more in-depth analysis, InvestingPro offers additional insights, including a comprehensive range of financial ratios and metrics. Using coupon code PRONEWS24, investors can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable resources. Currently, InvestingPro provides 8 more tips that could guide investment decisions regarding ONEOK, Inc.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.