Another Pipeline System Changes Hands in Marcellus Shale Play (PVR)

The transaction is expected to close in the second quarter of this year and will be paid in cash and the issuance to Chief of $200 million in a new class of limited partner interests called ‘Special Units’:

The Special Units are substantially similar to PVR common units, except that the Special Units will not pay or accrue distributions until they automatically convert to common units, on a one-for-one basis once the Special Units have not received six consecutive quarterly distributions following issuance.

An affiliate of Riverstone Global Energy and Power Fund V LP has agreed to purchase $400 million in Class B special units and two other private buyers will acquire $180 million in Penn Virginia Resources common units. The remaining $220 million will be financed “by issuing term debt prior to the closing of the Chief Gathering acquisition,” with a bridge loan from RBC if needed.

Shares in Penn Virginia Resources are up nearly 13% at $25.25 in a 52-week range of $20.85-$28.31.

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