Pembina Pipeline Corporation Announces Pembina Gas Infrastructure’s Agreement to Acquire Midstream Assets From Veren Inc.

Pembina Pipeline Corporation Announces Pembina Gas Infrastructure’s Agreement to Acquire Midstream Assets From Veren Inc.
Pembina Pipeline Corporation Announces Pembina Gas Infrastructure’s Agreement to Acquire Midstream Assets From Veren Inc.
Business Wire
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All financial figures are approximate and in Canadian dollars unless otherwise noted. This news release refers to certain financial measures that are not specified, defined or determined in accordance with Generally Accepted Accounting Principles ("GAAP"), including adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA"). For more information see "Non-GAAP and Other Financial Measures" herein.

CALGARY, Alberta, September 09, 2024--(BUSINESS WIRE)--Pembina Pipeline Corporation ("Pembina" or the "Company") (TSX: PPL; NYSE: PBA) is pleased to announce that Pembina Gas Infrastructure Inc. ("PGI"), a Western Canadian focused gas processing entity jointly owned by Pembina and KKR, has entered into agreements with Veren Inc. and certain affiliates thereof ("Veren") that include the acquisition of Veren’s Gold Creek and Karr area oil batteries and support for future infrastructure development (the "Transaction"). The net purchase price related to the acquisition of the batteries is $400 million ($240 million, net to Pembina).

"We are thrilled to enhance and further align our strategic partnership with Veren, a top-tier growth focused Montney and Duvernay producer," said Chris Rousch, PGI’s President & Chief Executive Officer. "This transaction demonstrates how our collaborative approach to infrastructure solutions creates a compelling value proposition for our customers."

Transaction Details

  • PGI will acquire four batteries in the Gold Creek and Karr areas, which include natural gas handling capacity of 320 million cubic feet per day and liquids handling capacity of 53,000 barrels per day. Natural gas from the batteries is processed at PGI’s Patterson Creek Gas Plant and both the batteries and the Patterson Creek Gas Plant are connected to Pembina’s Peace Pipeline system.

  • Veren will retain operatorship of the acquired assets, with operating costs and maintenance capital flowing through to Veren. Veren will also assume operatorship of the existing PGI-owned batteries in the area.

  • Additionally, PGI will fund up to $300 million, of which approximately one-third has already been committed, for Veren’s future battery and gathering infrastructure in the area (the "Veren Infrastructure"). Veren will construct and operate the batteries, and PGI will construct and operate high pressure gathering pipelines.

  • Veren will enter into a 15 year take-or-pay agreement for capacity at the acquired batteries, which also includes an area-of-dedication to PGI for gathering and processing services for all volumes Veren produces out of the Gold Creek and Karr areas.

  • Anticipated annual adjusted EBITDA associated with the acquisition of the batteries is initially expected to be approximately $50 million ($30 million, net to Pembina). Further capital deployment in support of commitments will generate incremental contracted EBITDA from corresponding fees and increased plant utilization.

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