Energy Transfer LP, a Dallas-based company, has completed the acquisition of Enable Midstream Partners LP, an Oklahoma City-based company, in an estimated $7.2 billion merger that was announced earlier this year, reports North American Energy Pipelines.
It’s an acquisition that means that Energy Transfer is now the owner and operator of over 114,000 miles of pipeline across 41 states, representing all of the major regions that produce oil and gas in the U. S. It’s yet another move by Energy Transfer to deleverage, and it brings in a large volume of fee-based cash flow for the midstream giant.
Together, the two companies are anticipated to create annual run-rate and efficiency synergies greater than $100 million, not including potential commercial and financial synergies. The merger gives Energy Transfer access to Enable’s natural gas processing and gathering assets in Oklahoma and the associated pipelines within and outside of the state.
The two largest unitholders in Enable, CenterPoint Energy Inc. and OGE Energy Corp, approved the terms earlier this year; collectively, the two companies own roughly 79% of all of Enable’s common units. Energy Transfer’s gathering and processing abilities across Oklahoma, Arkansas, East Texas, and Northern Louisiana are all expected to grow from the acquisition as one of midstream’s biggest companies continues its expansion within the industry.
AMLP Provides Midstream Exposure to Energy Transfer
The Alerian MLP ETF (AMLP) offers exposure to major midstream companies that are experiencing robust cash flow and increasing payouts to shareholders. The fund seeks to track the Alerian MLP Infrastructure Index, a rules-based index that is float-adjusted and modified cap-weighted.
The index is comprised of energy infrastructure MLPs that derive most of their cash flow from the storage, transportation, and processing of energy commodities. AMLP invests at least 90% of its assets into the securities within the underlying index and is classified as a C-Corp for tax purposes, utilizing a 1099 for tax reporting.
Recent tax legislation means that individuals and some non-corporate investors qualify for a 20% deduction against the taxable income from direct investment into MLPs.
Energy Transfer LP (ET) is carried at an 11.03% weighting in the fund, MPLX LP (MPLX) is carried at a 10.42% weight, and Western Midstream Partners (WES) is carried at a 10.19% weight.
AMLP carries an expense ratio of 0.90% and has total net assets of $4.98 billion.
For more news, information, and strategy, visit the Energy Infrastructure Channel.