Blog Coverage Tallgrass Energy Acquires Additional 25% Stake in Rockies Express Pipeline

Upcoming AWS Coverage on Magellan Midstream Partners

LONDON, UK / ACCESSWIRE / April 4, 2017 / Active Wall St. blog coverage looks at the headline from Leawood, Kansas based Tallgrass Energy Partners, L.P. (NYSE: TEP) as the Company announced on April 03, 2017, that it had acquired an additional 24.99% stake in Rockies Express Pipeline (REX) from Tallgrass Development, L.P. The cash transaction is valued at approximately $400 million and was effective from March 31, 2017. Register with us now for your free membership and blog access at:

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One of Tallgrass Energy Partners’ competitors within the Oil & Gas Pipelines space, Magellan Midstream Partners L.P. (NYSE: MMP), is estimated to report earnings on May 03, 2017. AWS will be initiating a research report on Magellan Midstream Partners following the release of its next earnings results.

Today, AWS is promoting its blog coverage on TEP; touching on MMP. Get all of our free blog coverage and more by clicking on the link below:

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The current acquisition raises TEP’s stake in REX to approximately 50%. TEP expects the transaction to be accretive to its unit-holders immediately. Tallgrass Development, L.P. had acquired 25% stake in REX from Sempra US Gas & Power, a unit of Sempra Energy, in March 2016 for $440 million.

Sharing his views on the acquisition, David G. Dehaemers, Jr., President and CEO of Tallgrass said:

“We are pleased to acquire an additional interest in REX at a very attractive price and we expect the transaction to be immediately accretive to unit-holders. We intend to recommend to the board of directors of our general partner that TEP increase its quarterly distributions for the second and third quarters of 2017 by an aggregate of at least $0.10 per unit or $0.40 per unit on an annualized basis.”

TEP is also expected to get 50% of the $150 million distribution claim that is due to REX from Ultra Resources, Inc. Ultra Resources had filed for bankruptcy, and as a result of its reorganisation plan it is expected to come out of bankruptcy before October 30, 2017. Ultra Resources is expected to clear REX’s $150 million distribution claim within three months of coming out of bankruptcy. TEP will therefore be eligible to the 50% of this distribution claim.

About Tallgrass Energy

Tallgrass Energy is the parent of holding Companies Tallgrass Energy Partners, L.P., Tallgrass Energy GP, L.P. (NYSE: TEGP) and Tallgrass Development, L.P. These holding Companies own, operate, acquire, and develop midstream energy assets in North America and provide transportation and storage of natural gas through their pipelines and natural gas processing assets. They cater to clients in the Rocky Mountain and Midwest regions of the US.

About Rockies Express Pipeline

Rockies Express Pipeline built and operates the Rockies Express Pipeline, which is 1,698-mile long and transports natural gas from north-western Colorado and Wyoming to eastern Ohio. It is one of the largest pipelines ever built in the US as well as in North America. It is also the only pipeline in the US that connects the Rocky Mountain and Appalachian supply basins to consumers located across the Midwest and beyond. The pipeline has 1.8 billion cubic feet per day of long-haul design capacity and has been fully operational since November 2009. It supplies natural gas to US states of Colorado, Wyoming, Nebraska, Kansas, Missouri, Illinois, Indiana, and Ohio. Tallgrass Energy Partners and Tallgrass Development together own 75% stake in the pipeline and the remaining 25% stake is owned by Phillips 66.

In January 2017, Tallgrass Energy and REX completed the REX Zone 3 Capacity Enhancement Project. The project has enabled the bidirectional transportation of natural gas and can transport 2.6 billion cubic feet of natural gas per day.

Stock Performance

On Monday, April 03, 2017, the stock closed the trading session at $53.29, marginally up 0.17% from its previous closing price of $53.20. A total volume of 249.97 thousand shares have exchanged hands. Tallgrass Energy Partners’ stock price surged 14.19% in the last three months, 14.32% in the past six months, and 54.18% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have rallied 14.19%. The stock is trading at a PE ratio of 23.99 and has a dividend yield of 6.12%. The market capital of TEP is $3.86 billion at Monday’s closing price.

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