AltaGas Ltd.

AltaGas Ltd.

September 12, 2013 22:50 ET

AltaGas Acquires 25 Percent Strategic Interest in North American Integrated Midstream Company

CALGARY, ALBERTA--(Marketwired - Sept. 12, 2013) - AltaGas Ltd. ("AltaGas") (TSX:ALA)(TSX:ALA.PR.A)(TSX:ALA.PR.U) announced today that it has entered into an agreement (the "Purchase Agreement") to acquire a 25 percent strategic interest in Petrogas Energy Corp. ("Petrogas"), a privately held leading North American integrated midstream company, for approximately 2.8 million shares of AltaGas Ltd. priced at $35.69, the 20-day volume weighted average price, and cash (the "Acquisition"). The Acquisition is expected to be meaningfully accretive to earnings and cash flow per share.

"Our investment in Petrogas provides strategic alignment with a major North American integrated midstream service provider and brings a unique opportunity to optimize and expand our current midstream assets, increasing our ability to move NGL's and crude oil to meet market demands. It also brings key infrastructure needed to develop our LPG export initiative," said David Cornhill, Chairman and CEO of AltaGas. "Petrogas is a strong fit with our strategy of adding assets that provide energy solutions for our customers."

Petrogas, with annual sales of over $2.7 billion and approximately $750 million in total assets, owns and operates extensive midstream facilities along with a logistics network consisting of over 1,500 rail cars and 24 rail and truck terminals. More specifically, Petrogas has major terminal and storage facilities with rail access in key energy hubs including Fort Saskatchewan, Alberta, Sarnia, Ontario, Griffith, Indiana, Conway, Kansas and Mt. Belvieu, Texas. Combined, Petrogas touches over 100,000 bbls/d of crude oil and other products, can store over 4 million barrels through owned and leased storage capacity for crude and other products and has throughput capacity for crude blending in excess of 25,000 bbls/d.

AltaGas and Petrogas have agreed to enter into a NGL marketing arrangement whereby Petrogas will purchase the NGL produced for AltaGas' account at AltaGas-owned processing facilities. The arrangement is expected to increase AltaGas' access to various NGL end use markets and improve optimization of AltaGas' natural gas processing facilities.

The Acquisition is expected to close on October 1, 2013, and is subject to customary regulatory approvals, including the approval of the Toronto Stock Exchange. AltaGas will continue to maintain its strong balance sheet and financial discipline and its commitment to maintaining an investment grade credit rating.

As part of the Purchase Agreement, AltaGas has retained a conditional option to purchase directly or indirectly up to an additional 25 percent interest in Petrogas in 2013. TD Securities Inc. is acting as exclusive financial adviser to AltaGas with respect to the proposed Acquisition.

Investment Highlights

  • The Acquisition provides a unique opportunity for AltaGas to leverage its infrastructure assets and capture synergies across business activities, unlocking value in our NGL assets;

  • The strategic location of AltaGas' NGL facilities combined with Petrogas' market expertise and infrastructure provide the ability to move NGL in and out of storage and transport to market to meet customer demand;

  • The Acquisition supports AltaGas' LPG export initiative and is expected to provide access to additional NGL markets across North America and internationally;

  • The Acquisition enhances CNG and LNG trucking opportunities;

  • The Acquisition provides expanded growth opportunities for AltaGas; and

  • Petrogas' assets are located in Canada and throughout key energy markets in the United States, providing a good geographic fit with AltaGas' current portfolio of assets.

About AltaGas Ltd.

AltaGas is an energy infrastructure business with a focus on natural gas, power and regulated utilities. AltaGas creates value by acquiring, growing and optimizing its energy infrastructure, including a focus on clean energy sources. For more information visit:

This news release contains forward-looking statements. When used in this news release, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "seek", "propose", "estimate", "expect", and similar expressions, as they relate to AltaGas or an affiliate of AltaGas, are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, business objectives, expected growth, results of operations, performance, business projects and opportunities and financial results including expected contributions by the Acquisition to AltaGas earnings and cash flow per share; the ability to leverage Petrogas assets and capture synergies; anticipated enhanced ability to meet customer needs; anticipated access to additional NGL markets with the optimization of AltaGas' facilities; and anticipated enhanced CNG and LNG trucking. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such statements reflect AltaGas' current views with respect to future events based on certain material factors and assumptions and are subject to certain risks and uncertainties, including without limitation, changes in market, competition, governmental or regulatory developments, general economic conditions and other factors set out in AltaGas' public disclosure documents. Many factors could cause AltaGas' actual results, performance or achievements to vary from those described in this news release, including without limitation those listed above. These factors should not be construed as exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this news release as intended, planned, anticipated, believed, sought, proposed, estimated or expected, and such forward-looking statements included in, or incorporated by reference in this news release, should not be unduly relied upon. Such statements speak only as of the date of this news release. AltaGas does not intend, and does not assume any obligation, to update these forward-looking statements. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

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