THE WALL STREET JOURNAL/DOW JONES NEWSWIRES: Magellan Midstream Partners Completes Acquisition Of Strategic Pipeline Systems: “Magellan Midstream Partners LP (MMP) closed its acquisition of more than 2,000 miles of refined petroleum products pipelines from affiliates of Shell Oil Products U.S. for about $490 million…” (ShellNews.net)
DOW JONES NEWSWIRES
Posted October 4 2004
TULSA, Okla. -- Magellan Midstream Partners LP (MMP) closed its acquisition of more than 2,000 miles of refined petroleum products pipelines from affiliates of Shell Oil Products U.S. for about $490 million, plus working capital and transaction costs.
In a press release Friday, Magellan said the acquired assets are in Colorado, Kansas, Oklahoma and Texas and include six active terminals and six system storage facilities with a combined storage capacity of about 6.4 million barrels.
The company said the purchase provides it with its own direct connection to the U.S. Gulf Coast refining region.
The company intends to begin work immediately on capital projects to expand the interconnections with its existing assets.
The acquisition was financed initially with about $180 million of cash, comprised of proceeds raised from equity offerings earlier this year, and borrowings of $300 million under a short-term acquisition facility and $50 million under an existing revolving credit facility.
On Aug. 11, Magellan Midstream priced priced an equity offering of 1.8 million units at $49.77 each in a secondary offering.
In connection with the acquisition, the incentive cash distributions to the general partner were reduced by $1.25 million, $5 million and $3 million for 2004, 2005 and 2006, respectively.
The acquisition is expected to immediately add to cash available by at least 15 cents per limited partner unit a year.
In 2003, the company reported net income per limited partner unit of $3.31.
Company Web site: http://www.magellanlp.com.
-Geoffrey Rogow; Dow Jones Newswires; 201-938-5400; AskNewswires@dowjones.com