Noble Midstream To Buy Addl Stakes In Delaware Basin, DJ Basin Infrastructure

(RTTNews) - Noble Midstream Partners LP (NBLX) said that it agreed to acquire additional interests in Colorado River DevCo LP and Blanco River DevCo LP for $270 million from Noble Energy Inc. (NBL). The acquisition will increase Noble Midstream's interest in Colorado River DevCo to 100% from 80%, and in Blanco River DevCo to 40% from 25%. Noble Energy will retain the remaining 60% interest in Blanco River DevCo.

The acquisition is expected to be immediately accretive to distributable cash flow per unit of the Partnership, based on a transaction value representing 8.2 - 9.2 times the next twelve months estimated earnings before interest, taxes, depreciation and amortization ("EBITDA") of the acquired interests.

Noble Midstream's management has recommended to the board of directors of Noble Midstream GP LLC, the Partnership's general partner, a second quarter distribution per unit increase of 8.5% above the first quarter distribution per unit of $0.4108, as compared to the previously announced 4.7% quarterly growth target.

In addition, Noble Midstream's management has also recommended to the Board of Directors that the Partnership re-confirm its 20% distribution per unit annual growth target following the proposed second quarter distribution.

As consideration for the acquisition, the Partnership has agreed to pay Noble Energy $270 million, consisting of $245 million in cash and 562,430 common units representing limited partner interests in the Partnership. Noble Midstream expects to fund the cash consideration with approximately $143 million of net proceeds from a concurrent private placement of common units and $102 million of borrowing under the Partnership's credit facility.

Total borrowing under the Partnership's credit facility is expected to be $192 million as of the end of the second quarter of 2017, including the expected borrowing for the acquisition. Pro forma for the acquisition and the consummation of the concurrent private placement of common units, the Partnership's liquidity position is expected to be $178 million as of June 30, 2017, consisting of approximately $158 million available under its credit facility and approximately $20 million of cash on hand.

Noble Midstream has updated its full year 2017 capital budget and guidance to reflect the acquisition and an improved operational outlook. The 2017 gross capital budget is unchanged; however total capital attributable to the Partnership is expected to increase by $30 million due to the additional interest acquired, and is now estimated to total $215 million - $235 million.

Noble Midstream now anticipates 2017 net income between $145 million and $152 million and EBITDA1 between $155 million and $168 million, which represents a 5% increase above the prior midpoint EBITDA1 guidance.

Separately, Noble Midstream Partners announced that it has priced a private placement of 3.53 million common units representing limited partner interests of the Partnership for gross proceeds of approximately $143 million.

Noble Midstream expects to use the net proceeds from the private placement to fund a portion of the acquisition of additional interests in Blanco River DevCo LP and Colorado River DevCo LP from Noble Energy, Inc. The private placement is expected to close June 26, 2017 in conjunction with the closing of the acquisition, both of which are subject to customary closing conditions.