Andeavor announced that it has agreed to acquire 100 percent of the equity of Rangeland Energy II LLC. Rangeland owns and operates assets in the Delaware and Midland Basins, including a recently constructed crude oil pipeline, three crude oil storage terminals and a frac sand storage and truck-loading facility.
Andeavor plans to integrate the acquired 110-mile crude oil pipeline (with ultimate throughput capacity of 145,000 barrels per day) and crude oil storage terminals with its nearby Conan Crude Oil Gathering System, currently under construction.
Once fully integrated, the combination of the two systems will provide producers access to multiple markets by connecting to existing takeaway pipeline systems. The combined system also supports Andeavor’s development of additional gathering systems in the area as well as enhancing commercial opportunities by providing direct access to the Midland market hub.
Andeavor expects the purchase price multiple to be approximately nine times expected 2018 EBITDA and approximately six times expected 2019 EBITDA, including synergies. Andeavor expects to drop down the pipeline assets to Andeavor Logistics, LP at a later date. The acquisition, which is subject to customary closing conditions including regulatory approval, is anticipated to close early in the first quarter of 2018.
Substantially all of Rangeland II’s field employees will be invited to remain with the asset as employees of Andeavor.