Spectra Energy Announces Proposed Offering of Common Stock
HOUSTON, Dec. 11, 2012 /PRNewswire/ -- Spectra Energy Corp (SE) announced today its intent to offer approximately 12,800,000 shares of its common stock in a registered public offering. In addition, the underwriters are expected to have a 30 day option to purchase up to 1,920,000 additional shares of the company's common stock.
Shares are to purchase two oil pipeline networks between Canada & the US.
Spectra Energy to buy Express-Platte pipeline for $1.25B
THE DEAL: Pipeline operator Spectra Energy Corp. is buying the 1,700-mile Express-Platte pipeline system for $1.25 billion in cash to build its oil transportation network.
THE PIPELINE: The Express-Platte moves crude from Western Canada to refineries in the Midwest and the Rockies.
THE BIG PICTURE: Spectra said that acquiring the network will help it benefit from the rapidly expanding North American oil market. The deal comes as U.S. oil production increases — monthly crude production reached its highest level since 1998 in September, according to the Energy Department — and follows several other large energy deals.
Spectra Energy buying Express-Platte Pipeline System in $1.49B deal
Spectra Energy Corp (NYSE: SE) said Tuesday it has agreed to purchase the Express-Platte Pipeline System from Kinder Morgan Energy Partners LP (NYSE: KMP), Borealis Infrastructure and the Ontario Teachers’ Pension Plan.
Houston-based Spectra Energy will acquire 100 percent of the ownership interests for $1.49 billion, including $1.25 billion in cash and $240 million in acquired debt. The deal is expected to close during the first half of next year, according to the company's Tuesday statement.
The 1,717-mile system is one of three major crude oil pipelines running from western Canada to the Midwest, Reuters reports.
It runs from Alberta, Canada, to Illinois and includes both the Express and Platte crude oil pipelines, which connect in Wyoming, Spectra Energy said in its statement. The Express pipeline has a capacity of 280,000 barrels per day, and the Platte’s capacity ranges from 164,000 barrels per day in Wyoming to 145,000 barrels per day in Illinois.
In the company’s Tuesday statement, Spectra Energy President and CEO Greg Ebel said the acquisition of the strategically located system is part of Spectra Energy’s incremental growth platform and will allow it to invest in other crude and refined product assets.
"The Express-Platte Pipeline System acquisition is an immediately accretive investment in a fee-based business that expands Spectra Energy's footprint into a rapidly growing area," Ebel said in the statement.
Also on Tuesday, Spectra Energy said it plans to offer 12.8 million shares of common stock in a public offering. The proceeds will go to funding acquisitions, capital expenditures and other general corporate purchases, which could include funding a portion of the Express-Platte deal.
Olivia Pulsinelli is the web producer for the Houston Business Journal's award-winning website.