Targa Resources Corp. (TRGP) reached an agreement to repurchase the outstanding equity in its Bakken assets, worth about $1.8 billion, from its private equity partner, the company announced during its fourth-quarter earnings call on Feb. 20.
Targa entered into the Bakken Badlands transaction in 2019 with Blackstone/GSO Blazer Holdings taking a 45% interest.
At the time, the company was heavily involved with developing its largest-ever project, the Grand Prix Pipeline and the plants and fractionators associated with it.
The company planned to maintain a controlling ownership of Targa Badlands LLC and to buy it back when it made financial sense, Meloy said. The Feb. 20 deal refinances the higher cost preferred equity with Targa’s lower cost of debt capital, allowing Targa to save money in the transaction.
“We have now taken out the last piece of creative financing that we utilized back then, to keep investing without dilution,” he said.
Legal firm Vinson and Elkins advised Targa on the agreement.
Along with a pipeline gathering system, the Badlands assets include two gas plants and a crude terminal facility.
The refinancing agreement is in line with Targa’s 2025 growth strategy, said CEO and Director Matt Meloy.
“We estimate another year of record financial and operational results in 2025 with over $600 million in EBITDA growth expected this year,” Meloy said.
Targa also announced plans to continue growing its network in the Delaware Basin with an expansion of its NGL network in the basin and two other NGL processing projects.
The Delaware Express project, a 100-mile, 30-inch diameter NGL pipeline, will expand Targa’s Grand Prix network in the Delaware. The Grand Prix Pipeline has a capacity of 1,000 bbl/d and runs to processing facilities in Mont Belvieu, Texas. The expansion will increase the company’s NGL capacity out of the Permian.
In Mont Belvieu, the company announced plans for Train 12, a 15,000 bbl/d NGL fractionator. Targa is also increasing its LPG export capacity at Galena Park on the Houston Ship Channel to 19 MMbbl/month.
“Our newly announced projects are needed to accommodate incremental NGL volumes from our five Permian processing plants currently under construction,” Meloy said.
Targa’s fourth-quarter natural gas sales were up by 47 BBtu/d over the same time in 2023, a nearly nearly 2% increase.
For 2024, the company recorded a record adjusted EBITDA of $4.1 billion, a 17% increase over 2023, thanks to a record full year of Permian, NGL transportation, fractionation and LPG export volumes.