Tallgrass Energy Buys 25% Stake In Rockies Express Pipeline For $400 Mln

(RTTNews) - Tallgrass Energy Partners, LP (TEP), a growth-oriented midstream energy operator, announced Monday that it has acquired an additional 24.99 percent membership interest in Rockies Express Pipeline LLC or REX from privately held Tallgrass Development, LP for cash consideration of $400 million, effective March 31.

The acquisition increases TEP's ownership interest in REX to approximately 50 percent.

Tallgrass President and CEO, David Dehaemers, Jr., said, "... we expect the transaction to be immediately accretive to unitholders. 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."

Further, the company noted that Ultra Resources, Inc. recently announced that the U.S. Bankruptcy Court confirmed its Chapter 11 reorganization plan. The plan contemplates payment of REX's $150 million claim within three months after Ultra emerges from bankruptcy, and no later than October 30, 2017.

Ultra has previously indicated it plans to emerge from bankruptcy during the month of April. TEP will receive its approximate 50 percent share of an expected approximately $150 million distribution from REX resulting from Ultra's settlement payment.