Market Commentary

Mark Green’s Favorite Energy Transfer Buys Lotus Midstream

Raza Akram · 2 minutes read

It was announced yesterday that Energy Transfer LP (ET:US), which is engaged in natural gas and propane pipeline transport, agreed to acquire pipeline operator Lotus Midstream.

The cash-and-stock deal is valued at $1.45 billion with Energy Transfer aiming to increase its presence in the Permian Basin. Lotus Midstream also owns and operates Centurion Pipeline.

Energy Transfer hopes it will be able to close the transaction in the second quarter of this year. The company expects that the acquisition will “immediately” boost its free cash flow.

“Energy Transfer’s acquisition of Lotus Midstream’s Centurion Pipeline assets will increase the Partnership’s footprint in the Permian Basin and provide increased connectivity for its crude oil transportation and storage businesses,” it is said in the press release.

“The Centurion assets, located across some of the most active areas of the Permian Basin, provide significant gathering volumes from key producers while also enhancing Energy Transfer’s access to key downstream markets with consistent sources of demand. The assets provide direct access to major hubs including Cushing, Midland, Colorado City, Wink and Crane. The system is anchored by large cap producer customers with firm, long-term contracts, and significant acreage dedications.”

The deal comes as Congressman Mark Green continues to offload ET shares. The latest reported sales occurred on February 16, when the stock closed at $13.05. Rep. Green sold $50,000 - $100,000 worth of ET shares after previously selling shares in January and December.

The period of continued selling came after Congressman had initially built a stake in ET. In the first half of 2022, Rep. Green reported several buy transactions, including the $500,000 - $1 million investment in ET in February last year when the stock was trading below $10 a share. 

Energy Transfer stock closed at $11.84 on Monday.