Exco Operating Company, an affiliate of BG Group, has signed an agreement to sell its 100% equity interest in TGGT Holdings to Azure Midstream for approximately $910m.
Of the total value, around $875m will be in cash and the remaining portion will be in the form of an approximate 8% equity interest in the US-based Azure Midstream split equally between Exco and BG Group.
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Exco hopes to get net cash proceeds of approximately $230m after the midstream energy company TGGT pays off its credit agreement and net of transaction costs and closing adjustments.
The company will use the cash proceeds to cut down the asset sale tranche under its credit agreement.
Exco chairman and chief executive officer Douglas Miller said: "We are pleased to have reached this agreement with Azure and look forward to a long-term relationship in the East Texas and North Louisiana area."
As a result of the transaction, which is expected to close in the fourth quarter of 2013, BG Group will receive $231m in cash, along with a $17m interest in Azure Midstream, equalling around a 4% equity holding, for its entire 50% interest in TGGT.
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By GlobalDataOil and natural gas exploration, exploitation, development and production company EXCO Resources is headquartered in Dallas, Texas and has principal operations in Texas, North Louisiana and Appalachia.
TGGT is a 50% joint venture of EXCO Resources and BG Group. It owns and operates its midstream assets through the subsidiaries TGG Pipeline and Talco Midstream Assets.
Image: As a result of the transaction BG Group would receive $231m in cash. Photo: courtesy of Victor Habbick / FreeDigitalPhotos.net.
