American Midstream Partners LP (NYSE:AMID) Stocks Up More Than 20% on Acquisitions


American Midstream Partners LP (NYSE:AMID) stocks jumped 21.83% to $11.05 when the company announced several “strategic and accretive” acquisitions.

Share prices had been moving below $10 before the company made their announcement on Monday’s after-hours trading. American Midstream Partners LP (NYSE:AMID) shared that it acquired interests in the Destin natural pipeline, Tri-States and Wilprise natural gas pipelines, a majority interest in crude, natural gas, and salt water onshore and offshore pipelines in the Gulf of Mexico, an incremental interest in Delta House, which is a semi-submersible floating production in the Gulf of Mexico.

These acquisitions amounted to a total of $225 million. American Midstream Partners LP (NYSE:AMID) also has plans to acquire a stake in another offshore natural gas pipeline in the second quarter of this year. The company expects these acquisitions to yield a 100% year-over-year growth in adjusted EBITDA and distributable cash flow.

According to Lynn Bourdon, Chairman, President and Chief Executive Officer of American Midstream Partners LP (NYSE:AMID), these acquisitions can allow the company to expand their midstream footprint and diversify their cash-flow profile. He explained that this is an important step in transforming American Midstream into a significant and integrated participant in offshore infrastructure, particularly in the deep-water.

He added that their acquisition of the onshore segment of Destin can extend their gas transmission footprint into an active region serving the southeast marketplace. Additional pipelines can allow them to increase their size and scale through incremental fee-based cash flows supported primarily by take-or-pay contracts and life-of-lease dedications.

American Midstream Partners LP (NYSE:AMID) is engaged in the gathering, treating, processing, and transporting natural gas in the United States. It owns and operates 12 gathering systems, 5 processing facilities, 3 fractionation facilities, 3 marine terminal sites, 3 interstate pipelines, 5 intrastate pipelines, and 1 crude oil pipeline. It has stakes in other oil gathering systems and pipelines, as well as the Burns Power Plant.


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