McGuireWoods lawyers from the firm’s Houston and Chicago offices advised Tesoro Logistics LP in its $2.5 billion acquisition of QEP Resources Inc.’s natural gas pipeline and processing business, the latest in a series of major asset acquisitions McGuireWoods has negotiated for the Fortune 100 energy company.
Tesoro Logistics is an affiliate Tesoro Corp., which operates six petroleum refineries in the western United States with a combined capacity of more than 850,000 barrels per day. Its acquisition of QEP Field Services includes strategically located, high-quality natural gas pipelines and processing facilities in the Rockies, the Uinta Basin and North Dakota. The acquisition of QEP Field Services will enable Tesoro Logistics to offer integrated crude oil and natural gas services throughout its geographic footprint. The transaction is expected to close in the fourth quarter of 2014 and is subject to regulatory approval.
McGuireWoods lawyers have negotiated multiple asset acquisitions for San Antonio-based Tesoro Logistics since its formation and initial public offering as a master limited partnership (MLP) in 2011. Those acquisitions include two transactions that stemmed from Tesoro Corp.’s $2.5 billion purchase of BP’s Carson refinery and logistics assets in Southern California in 2013. McGuireWoods represented Tesoro Logistics in the transfer of BP’s former pipeline and logistics assets from Tesoro Corp.
“This deal speaks volumes about the firm’s bandwidth for complex transactions of this size, and about our range of capabilities in the MLP space,” said McGuireWoods partner David Ronn, who led the firm’s negotiating team. Based in Houston, Ronn is co-head of the firm’s oil and gas industry team.
Master limited partnerships offer the liquidity of a publicly traded company, but are exempt from corporate income taxes. They have enjoyed explosive growth in the energy sector as a vehicle for accessing capital markets, but face complex governance, securities, accounting and regulatory issues. McGuireWoods has a cross-disciplinary team of corporate, energy and tax lawyers who provide industry-leading advice to clients in all aspects of MLP transactions.
“This is a game-changing deal for Tesoro and it took great teamwork by lawyers across multiple practices and offices to make it happen,” said Craig Culbertson, a mergers and acquisitions partner in the firm’s Chicago office and leader of McGuireWoods’ Tesoro team.
Chicago-based debt finance partners Donald Ensing and Yuan-Ying Hsu advised on financing matters. Corporate partner Rachel Mantz, also based in Chicago, and Houston associate Ryan Griggs worked closely with Ronn.