QEP finalizes sale of midstream business

By Emily Aasand | December 03, 2014

QEP Resources announced that its wholly owned subsidiary, QEP Field Services Company, has completed the sale of its midstream business and its ownership interest in QEP Midstream Partners LP to Tesoro Logistics LP in a transaction valued at $2.5 billion.

“With the closing of this transaction, QEP has achieved a significant milestone in its transformation to become a more competitive and financially strong independent exploration and production company with assets in two of North America’s most prolific crude oil provinces, the Williston and Permian Basins, and low-cost, high quality natural gas properties in the Rocky Mountains and in northwest Louisiana,” said Chuck Stanley, chairman, president and CEO of QEP. “Emerging from this transaction, we believe QEP is well positioned to compete throughout all commodity market cycles as a result of our strong balance sheet, our focused portfolio of both crude oil and natural gas assets and our relentless commitment to creating value for our shareholders.”

QEP said it repaid its $600 million term loan and all of the borrowings under its revolving credit facility, including $230 million that was borrowed to refinance QEPM’s outstanding indebtedness. The company also announced that it has amended and extended its corporate revolving credit facility.

In mid-October, QEP announced that it had entered an agreement to sell its midstream business to, “allow us to maximize shareholder value by deploying proceeds from the sale through multiple avenues, including returning capital to shareholders, reducing debt, and improving our competitive position through investment in our premier exploration and production assets.”

In QEP’s third quarter results, the company reported a crude oil production of 4.7 million barrels and had an increased daily crude oil production by 77 percent over the third quarter in 2013 to 50.8 thousand barrels of oil per day which was driven by a year-over-year Williston Basin oil production growth of 115 percent.