This excerpt taken from the APL 8-K filed Jun 5, 2007.
Item 1.01 Entry into a Material Definitive Agreement.
Joint Venture Transaction
On June 1, 2007, Atlas Pipeline Partners, L.P. (APL) entered into definitive agreements with Western Gas Resources, Inc. and Western Gas Resources Westana, Inc., subsidiaries of Anadarko Petroleum Corporation (NYSE: APC) (Anadarko), pursuant to which APL will acquire control of (the Transaction) Anadarkos 100% interest in natural gas gathering systems and processing plants known as the Chaney Dell System located in Oklahoma and its approximate 73% interest in natural gas gathering systems and processing plants known as the Midkiff/Benedum System located in Texas (the Assets). The Transaction will be effected by the formation of two joint venture companies which will own the respective systems, to which APL will contribute an aggregate of $1.85 billion and Anadarko will contribute the Assets. The amount of the APL contribution is subject to adjustment before closing based, among other items, on natural gas liquids inventory and gas imbalances, and to further adjustment after closing based on the final settled value of the pre-closing and other adjustments. The Midkiff/Benedum system is subject to a third-partys preferential right, the exercise of which, if any, would occur prior to the expected closing. If such right is exercised, the amount of the APL contribution would be reduced. Copies of the master formation agreements with respect to these joint ventures are attached hereto as Exhibits 2.1 and 2.2.
Consummation of the Transaction, which APL expects will occur on or about July 11, 2007, is subject to customary closing conditions. There can be no assurance that all of the closing conditions will be satisfied.
On June 1, 2007, APL received a commitment from Wachovia Bank, National Association and Wachovia Capital Markets, LLC to arrange the syndication of (i) a $900.0 million senior secured term loan which matures in 2014 and (ii) a $250.0 senior secured revolving credit facility that matures in 2013 (the Credit Facility). Borrowings under the Credit Facility will be secured by a lien on and security interest in all of APLs property and that of its subsidiaries, except for the assets owned by the joint venture companies, and by the guaranty of each of its subsidiaries other than the joint venture companies. APL anticipates borrowing under the Credit Facility in order to finance a portion of its cash contribution in the Transaction and to refinance any amounts then outstanding under its current credit facility. A copy of the commitment letter for the Credit Facility is attached hereto as Exhibit 10.2.
Common Unit Purchase Agreement
On June 1, 2007, APL also executed a common unit purchase agreement for a private placement of $1.125 billion of its common units to investors at a negotiated purchase price of $44.00 per unit. Approximately $168.8 million of these units will be purchased by Atlas Pipeline Holdings, L.P., the parent of APLs general partner. The closing for the unit purchase agreement will occur
contemporaneously with the closing of the Transaction. The common units will be issued and sold in a private transaction exempt from registration under Section 4(2) of the Securities Act of 1933, as amended. A copy of the unit purchase agreement is attached hereto as Exhibit 10.1.
Management believes that the proceeds from this private equity placement, together with funds available under the Credit Facility, will fully fund the APL contribution in the Transaction. The issuance of the common units is subject to customary closing conditions, including the closing of the Transaction, and there can be no assurance that all of the conditions to closing will be satisfied.