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Targa Resources Corp. 8-K Report, Material Agreement (Jun 17, 2022)

Filed June 17, 2022For Securities:TRGP

Summary

Targa Resources Corp. (TRGP) announced on June 17, 2022, its entry into a definitive agreement to acquire Lucid Energy Group II Holdings, LLC (through its subsidiary Lasso Acquiror LLC) for $3.55 billion in cash. This strategic acquisition significantly expands Targa's footprint in the Delaware Basin, a highly prolific oil and gas region. The acquired assets include approximately 1,050 miles of natural gas pipelines and 1.4 billion cubic feet per day of natural gas processing capacity, enhancing Targa's midstream infrastructure and service offerings. Investors should note that the transaction is subject to customary closing conditions, including regulatory approvals, with an expected closing during the third quarter of 2022. The acquisition is poised to bolster Targa's growth trajectory and market position within a key operational area, although the company acknowledges various risks and uncertainties inherent in such large transactions and the broader energy market.

Key Highlights

  • 1Targa Resources to acquire Lucid Energy Group II Holdings, LLC for $3.55 billion in cash.
  • 2The acquisition expands Targa's presence in the Delaware Basin, a key energy producing region.
  • 3Acquired assets include approximately 1,050 miles of natural gas gathering pipelines.
  • 4Included in the deal is approximately 1.4 billion cubic feet per day of natural gas processing capacity (in service or under construction).
  • 5The transaction is expected to close in the third quarter of 2022, subject to regulatory approvals and other customary conditions.
  • 6The company issued a press release and investor presentation to announce and detail the acquisition.

Frequently Asked Questions

The acquisition of Lucid Energy significantly expands Targa Resources' midstream infrastructure in the Delaware Basin, a highly attractive and prolific natural gas producing area. This move enhances Targa's gathering, treating, and processing capabilities, strengthening its integrated service offerings in a key operational region.

Targa Resources is acquiring substantial natural gas midstream assets, including approximately 1,050 miles of natural gas pipelines and approximately 1.4 billion cubic feet per day of natural gas processing capacity. These assets are primarily located in Eddy and Lea counties, New Mexico.

The total cash consideration for the Lucid Energy acquisition is $3.55 billion, subject to certain adjustments as outlined in the Purchase and Sale Agreement. The transaction is anticipated to close during the third quarter of 2022, contingent upon the satisfaction of customary closing conditions, including regulatory approvals.

Yes, Targa Resources acknowledges several risks and uncertainties. These include the possibility that the acquisition may not close on a timely basis or at all, potential challenges in realizing expected benefits, and broader market risks such as commodity price volatility, geopolitical events (like the conflict in Ukraine), and general economic conditions. Investors are advised to review the company's SEC filings for a comprehensive list of these factors.