Source: Regency Energy Partners
Regency Energy Partners LP (Nasdaq:RGNC) has agreed to acquire Zephyr Gas Services, a field services company based in Houston, Texas, for $185 million. Regency intends to fund the acquisition under its revolving credit facility.
Zephyr’s assets closely align with Regency’s Gathering and Processing and Compression segments as both are strategically located in high-growth areas, including the Haynesville and Eagle Ford shales. In addition to treating, Zephyr provides a full range of field services, including gas cooling, dehydration, JT plant leasing and sulfur treating services. Regency expects to integrate Zephyr’s current management into the existing reporting structure of its Contract Compression segment.
The acquisition of Zephyr will also complement Regency’s existing Contract Compression segment. Both have similar business models, including a focus on large-scale, centralized field-wide applications and the utilization of common components packagers. The combination of Zephyr’s treating expertise, along with Regency’s existing midstream segments, will allow Regency to provide a comprehensive service offering to existing and potential customers. This combination should enable Regency to better compete against key competitors in terms of product offerings and ability to bid turnkey projects.
“With a high-quality treating platform added to our existing midstream, compression and transportation business segments, we believe we will be able to provide a full suite of contract services and an unmatched set of offerings for our producers,” said Byron Kelley, president and CEO of Regency. “In addition, the acquisition of Zephyr will add fee-based margins to Regency’s business mix and is expected to be immediately accretive.”
Regency Energy Partners LP (Nasdaq:RGNC) is a growth-oriented, midstream energy partnership engaged in the gathering, contract compression, processing, marketing and transporting of natural gas and natural gas liquids. Regency's general partner is owned by Energy Transfer Equity, L.P. (NYSE:ETE).