Ferrellgas Partners LP (FGP) has announced a definitive agreement to acquire two salt water disposal (SWD) wells in the Eagle Ford Shale region of south Texas from C&E Production, LLC (C&E) and its affiliates, based in Bryan, Texas. The acquisition will increase the partnership's SWD wells in the region to eight. Ferrellgas established its midstream division in May 2014 with its acquisition of Sable Environmental LLC. The C&E assets will be managed with other existing SWD facilities under the Sable platform, increasing the daily operational permitted capacity 33% to 180,000 barrels. In addition, Ferrellgas will have the contractual right to acquire an additional SWD well from C&E affiliates in the region in the future.
Associated with the transaction, equity holders of the C&E SWD assets will acquire $12 million of Ferrellgas common units. Ferrell Companies Inc., the parent company of the partnership's general partner, will also acquire $30 million of Ferrellgas common units. Proceeds from these offerings will be used to permanently finance this transaction as well as other recent growth initiatives.
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