Oklahoma based Laredo Petroleum, Inc. (NYSE: LPI) has agreed to sell its take in its Permian pipeline unit for around $825 million.
Infrastructure fund Global Infrastructure Partners are expected to buy up 100% of the wholly owned subsidiary responsible for the Midland Basin pipeline system for $1.83 billion.
Net cash proceeds are expected to be approximately $825 million.
Randy A. Foutch, chairman and chief executive officer for Laredo, said: “In late 2013, we made our initial investment in MGP, creating a partnership to build a pipeline system to provide Laredo access to multiple sales points for its oil.
“This eventually grew into the premier pipeline system in the Midland Basin. Upon the closing of this Transaction, Laredo will recognize proceeds of more than three times its invested capital, equivalent to an internal rate of return of more than 65%, and, through our various ongoing contracts with Medallion, retain the strategic
benefits that were the initial goal for building the system.”
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