Natural gas infrastructure provider American Midstream Partners L.P. (AMID) has closed its previously announced acquisition of Louisiana-based terminal storage operator Blackwater Midstream Holdings LLC from a subsidiary of ArcLight Capital Partners, LLC. for about $60 million in cash and stock.
The transaction, which was declared on Dec 10, includes three operating terminal facilities of Blackwater. The sites – at Westwego (Louisiana), Brunswick (Georgia) and Salisbury (Maryland) – have a combined storage capacity of 1.3 million barrels and can be used to keep different materials like chemical, agricultural, and petroleum liquid products. American Midstream will also get access to a potential development site in Harvey, Louisiana, close to Blackwater’s Westwego terminal.
Both Blackwater’s facilities – Westwego and Brunswick – are working at full capacity, with the possibility of further expansions, while the Harvey brownfield site is expected to be online next year and can be potentially cranked up to 2 million barrels at full capacity.
The acquisition is expected to immediately add to the Denver-based American Midstream’s cash flows. Importantly, it will give a fillip to the partnership’s position in the midstream industry’s fee-based contracts segment that is not directly associated with commodity price volatility.
American Midstream, which currently retains a Zacks Rank #3 (Hold), is engaged in the gathering, processing and transmission of natural gas, transportation, fractionation and storage of natural gas n the Gulf Coast and Southeast regions of the U.S.
However, some better-ranked energy stocks include Harvest Natural Resources Inc. (HNR), Pacific Drilling S.A. (PACD) and Abraxas Petroleum Corp. (AXAS). All these entities – sporting a Zacks Rank #1 (Strong Buy) – have solid secular growth stories with potential to rise significantly from current levels.
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment