CorEnergy To Buy Grand Isle Gathering System For $245 Mln

(RTTNews) - CorEnergy Infrastructure Trust, Inc. (CORR) said Monday that it has agreed to buy the Grand Isle Gathering System, a subsea, midstream pipeline system with related onshore facilities serving oil-producing fields in the shallow portion of the Gulf of Mexico, from Energy XXI USA, Inc. for $245 million in cash.

The Grand Isle Gathering System includes 153 miles of undersea pipeline that transports oil and water from six Energy XXI fields and one field operated by ExxonMobil. The 16-acre terminal includes four storage tanks, a saltwater disposal facility with three injection wells, and associated pipelines, land, buildings and facilities.

The Grand Isle Gathering System system currently transports about 60,000 barrels/day (18,000 oil and 42,000 water) with total capacity of 120,000 barrels/day.

CorEnergy will acquire 100% of the Grand Isle Gathering System assets for a cash purchase price of $245 million and the assumption of asset retirement obligation liabilities estimated at about $12.5 million, for a total consideration of $257.5 million.

CorEnergy expects to finance the $245 million acquisition with a combination of a follow-on common stock offering of 11.25 million shares, a new issue of convertible debt totaling $75 million, and an expansion of its existing Senior Credit Facilities. The remainder of the acquisition cost will be funded with cash that CorEnergy anticipates having available at the time of closing.

The deal is expected to close in late June.