Targa Resources to buy Permian gas processor Lucid Energy in $3.5B deal

Jun. 16, 2022 5:05 PM ETTarga Resources Corp. (TRGP)By: Carl Surran, SA News Editor5 Comments

Golden pipes going to oil refinery

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Targa Resources (NYSE:TRGP) said on Thursday it agreed to acquire Lucid Energy from Riverstone Holdings and Goldman Sachs Asset Management for $3.55B in cash.

Lucid provides natural gas gathering, treating and processing services in the Delaware Basin, including more than 1,000 miles of natural gas pipelines and 1.4B cf/day of cryogenic natural gas processing capacity in service or under construction, anchored by long-term, fixed-fee contracts.

Targa (TRGP) raised guidance for standalone FY 2022 adjusted EBITDA to $2.675B-$2.775B, after previously expecting $2.3B-$2.5B.

The company expects the deal will be immediately accretive to distributable cash flow per share.

"This is an exciting acquisition that aligns with our integrated strategy as we are expanding and diversifying our Permian Basin footprint with Lucid's complementary presence at an attractive investment multiple," CEO Matt Meloy said.

Targa Resources' (TRGP) "capital allocation prowess is creating value for shareholders," HFIR MLPs writes in a bullish analysis published on Seeking Alpha.

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