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Targa Resources To Sell 45% Interest In Bakken Assets For $1.6 Bln

Targa Resources Corp. (TRGP) said Tuesday that it has agreed to sell a 45 percent interest in Targa Badlands LLC, the entity that holds all of Targa's assets in North Dakota, to funds managed by GSO Capital Partners and Blackstone Tactical Opportunities for $1.6 billion in cash.

The transaction is expected to close in the second quarter of 2019. Targa expects to use the net cash proceeds to pay down debt and for general corporate purposes including funding its growth capital program.

Under the terms of the executed agreements, Targa will continue to be the operator and will hold majority governance rights in Badlands. Future growth capital is expected to be funded on a pro rata basis.

Badlands will pay a minimum quarterly distribution to Blackstone and to Targa based on their initial investments, and Blackstone's capital contributions will have a liquidation preference upon a sale of Badlands.

The Badlands assets and operations are located in the Bakken and Three Forks Shale plays of the Williston Basin in North Dakota and include about 480 miles of crude oil gathering pipelines, 125,000 barrels of operational crude oil storage, approximately 260 miles of natural gas gathering pipelines and the Little Missouri natural gas processing plant with a current gross processing capacity of approximately 90 million cubic feet per day or MMcf/d.

In addition, Badlands owns a 50 percent interest in the 200 MMcf/d Little Missouri 4 or LM4 Plant that is anticipated to be completed in the second quarter of 2019.

"We are very proud of our talented employees and assets in the Badlands, and our joint venture with Blackstone will support us in continued growth while providing best in class service to our customers in the Bakken. Selling a minority interest in the Badlands at an attractive valuation allows us to satisfy a substantial portion of our estimated 2019 equity funding needs and provides us with significant flexibility looking forward," said Joe Bob Perkins, Chief Executive Officer of the company.

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