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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 1, 2011 (June 30, 2011)
SPECTRA ENERGY PARTNERS, LP
(Exact name of Registrant as specified in its charter)
         
Delaware   1-33556   41-2232463
(State or other jurisdiction   (Commission   (IRS Employer
of incorporation)   File Number)   Identification Number)
5400 Westheimer Court
Houston, Texas 77056
(Address of principal executive offices)
(713) 627-5400
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


TABLE OF CONTENTS

Item 2.01 Completion of Acquisition or Disposition of Assets
Item 7.01 Regulation FD Disclosure
Item 9.01. Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EX-2.1
EX-99.1


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Item 2.01 Completion of Acquisition or Disposition of Assets.
     As previously disclosed, on May 11, 2011, Spectra Energy Partners, LP ( “SEP”), entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with Equitrans, L.P. (“Equitrans”), EQT Corporation (“EQT”) and Spectra Energy Capital, LLC (“SE Capital”), to acquire all of the ownership interests of Big Sandy Pipeline, LLC (“Big Sandy”) from Equitrans (the “Big Sandy Acquisition”). On July 1, 2011, SEP closed the Big Sandy Acquisition for total cash consideration of approximately $390 million, less a $10 million holdback to secure certain post-closing obligations of Equitrans. The cash consideration used in the Big Sandy Acquisition was funded through equity and debt financing.
     The primary asset acquired by SEP from Equitrans in the Big Sandy Acquisition is an approximately 70-mile Federal Energy Regulatory Commission (“FERC”)-regulated natural gas pipeline system in eastern Kentucky with capacity of 171,000 dekatherms per day. The natural gas pipeline system connects Appalachian and Huron Shale natural gas supplies to markets in the Mid-Atlantic and Northeast portions of the United States.
     Under the Purchase Agreement, EQT has the option, until January 1, 2018, to cause Big Sandy to increase capacity on the Big Sandy pipeline system and to make capacity available to EQT in three tranches of between 50,000 dekatherms per day to 150,000 dekatherms per day (not to exceed an aggregate of 150,000 dekatherms per day), on a firm basis for a term of 15 years, subject to certain terms and conditions set forth in the Purchase Agreement.
     On June 30, 2011, in connection with the closing of the Big Sandy Acquisition, SEP, Equitrans, EQT and SE Capital entered into an amendment (the “Amendment”) to the Purchase Agreement in order to extend certain indemnification obligations of Equitrans, among other things. The foregoing description of the Amendment is qualified in its entirety by reference to the copy of the Amendment filed as Exhibit 2.1 to this report and incorporated by reference into this Item.
Item 7.01 Regulation FD Disclosure.
     On July 1, 2011, SEP issued a press release announcing the closing of the Big Sandy Acquisition. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
     The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Item 9.01. Financial Statements and Exhibits.
          (d)  Exhibits.
     
Exhibit
Number
  Description of the Exhibit
 
Exhibit 2.1*
  First Amendment to Purchase and Sale Agreement, by and among Equitrans, L.P. and, solely for the purpose of Sections 1.8, 1.9, 4.17 and 9.15, EQT Corporation, Spectra Energy Partners, LP and, solely for the purpose of Section 9.16, Spectra Energy Capital, LLC.
 
   
Exhibit 99.1
  Press Release of Spectra Energy Partners, LP, dated July 1, 2011.
 
*   Pursuant to the rules of the Securities and Exchange Commission, the schedules and similar attachments to the agreement have not been filed herewith. The registrant agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.

 


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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
    SPECTRA ENERGY PARTNERS, LP
 
       
 
  By:   Spectra Energy Partners (DE) GP, LP,
 
      its general partner
 
       
 
  By:   Spectra Energy Partners GP, LLC,
 
      its general partner
 
       
Date: July 1, 2011
      /s/ Laura Buss Sayavedra
 
 Laura Buss Sayavedra
 
      Vice President and Chief Financial Officer

 


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EXHIBIT INDEX
     
Exhibit
Number
  Description of the Exhibit
 
Exhibit 2.1*
  First Amendment to Purchase and Sale Agreement, by and among Equitrans, L.P. and, solely for the purpose of Sections 1.8, 1.9, 4.17 and 9.15, EQT Corporation, Spectra Energy Partners, LP and, solely for the purpose of Section 9.16, Spectra Energy Capital, LLC.
 
   
Exhibit 99.1
  Press Release of Spectra Energy Partners, LP, dated July 1, 2011.
 
*   Pursuant to the rules of the Securities and Exchange Commission, the schedules and similar attachments to the agreement have not been filed herewith. The registrant agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.

 

Exhibit 2.1
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
     THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this “ Agreement ”) is made and entered into as of June 30, 2011, by and among Equitrans, L.P., a Pennsylvania limited partnership (the “ Seller ”), Spectra Energy Partners, LP, a Delaware limited partnership (the “ Buyer ”), EQT Corporation, a Pennsylvania corporation (“ EQT ), and Spectra Energy Capital, LLC, a Delaware limited liability company (“ SE Capital ”). The Seller and the Buyer are referred to herein as the “parties” and individually as a “party”.
RECITALS
     WHEREAS, the parties, EQT and SE Capital have entered into that certain Purchase and Sale Agreement dated as of May 11, 2011 (the “ PSA ”);
     WHEREAS, the parties desire to amend the PSA as described in this Agreement and stipulate to certain events under the PSA; and
     WHEREAS, EQT and SE Capital, in their respective limited capacities described in the PSA, have joined herein to evidence their consent to the amendments to the PSA and stipulations described in this Agreement.
     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
      Section 1.1 Definitions .
     All capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth (or otherwise provided for) in the PSA.
      Section 1.2 Amendment to Article IV of the PSA .
     Article IV of the PSA is hereby amended to add the following new Section 4.18:
     Section 4.18 AC Mitigation .
     From and after the Closing the Company will repair and test, or cause to be repaired and tested, the AC mitigation system for the Pipeline in accordance with the written proposal dated June 13, 2011 received by EQT, Inc. from ARK Engineering & Technical Services, Inc. Seller covenants and agrees that Seller shall reimburse the Company for the actual costs and expenses incurred for the AC mitigation work up to the amount of $45,000, within fifteen (15) days following receipt by Seller of Company’s written request together with supporting documentation.

 


 

      Section 1.3 Amendment to Section 8.1 of the PSA.
     Section 8.1 of the PSA is hereby amended and restated in its entirety to read as follows:
     Section 8.1 Indemnification of the Buyer.
     Subject to the limitations set forth in this Agreement, the Seller, from and after the Closing Date, shall indemnify, defend and hold the Buyer, its Affiliates (including the Company) and their respective, directors, officers, and employees (the “ Buyer Indemnified Parties ”) harmless from and against any and all Damages suffered or incurred by any Buyer Indemnified Party as a result of or arising out of (a) any breach or inaccuracy of a representation or warranty of the Seller in this Agreement or the Seller Closing Certificate, (b) any breach of any agreement or covenant on the part of the Seller made under this Agreement, (c) the Seller Pre-Closing Liabilities, (d) any Indebtedness not taken into account in connection with the adjustment of the Purchase Price under Section 1.2 , (e) all Mineral Owner Obligations, and (f) all Easement Title Claims. Notwithstanding the foregoing, in no event shall the Seller’s aggregate liability to the Buyer Indemnified Parties under Section 8.1(f) exceed $1,500,000. For purposes of this Section 8.1 , whether the Seller has breached any of its representations and warranties herein, and the determination and calculation of any Damages resulting from such breach, shall be determined without giving effect to any qualification as to “materiality” (including the word “material” or “Material Adverse Effect”).
      Section 1.4 Amendment to Subsection 10.1 of the PSA .
     Section 10.1 is hereby amended to add the following definition:
     “ Easement Title Claim ” means any claim by a Third Party challenging the Company’s, or any of its successors’ or assigns’, title or interest in any Easement used in connection with the Transferred Business due to (i) the fact that such Easement was initially taken in the name of Equitable Gathering Company, LLC or Equitable Gathering Co., LLC, or (ii) the fact that the original executed and acknowledged copy of such Easement was not filed in the real property records of the county in which such Easement is located.
      Section 1.5 Exhibits .
          (a) Exhibit A (General Conveyance, Assignment and Bill of Sale) to the Contribution Agreement attached to the PSA as Exhibit A has been superseded and replaced in its entirety by Exhibit I attached hereto.
      Section 1.6 Disclosure Schedules .
          (a) The “Real Property” portion of Disclosure Schedule 2.6(a) (originally pages 1 through 57) to the PSA is amended and restated in its entirety to conform to Schedule 2.6(a) — Real Property attached hereto.

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          (b) Disclosure Schedule 2.13 to the PSA is amended and restated in its entirety to conform to Schedule 2.13 — Contracts attached hereto.
      Section 1.7 Intentionally Omitted .
      Section 1.8 Closing Payment .
          Pursuant to Section 1.2(b) of the PSA, Seller has prepared in consultation with, and delivered to, Buyer its good faith estimate of the Initial Adjustment, together with its calculation of the Closing Date Estimate, a copy of which is attached as Exhibit J hereto. Based on the Closing Date Estimate, the Closing Payment is $389,474,639, of which (a) $379,474,639 shall be paid to Seller at the Closing in accordance with Sections 1.4 and 1.6(b) of the PSA, and (b) $10,000,000 shall be retained by Buyer as the Closing Payment Holdback in accordance with Section 1.4(a) of the PSA. Notwithstanding anything contained in the PSA to the contrary, Buyer and Seller have agreed to exclude all accounts receivable of the Company as of the Closing Date from Current Assets, Working Capital, Working Capital Adjustment, Initial Adjustment, the Closing Date Estimate, the Closing Payment, the Closing Date Balance Sheet, the Closing Date Working Capital, the Closing Statement, and the Final Closing Statement, and that Seller shall be entitled to receive and retain all proceeds from such accounts receivable.
      Section 1.9 Miscellaneous .
          (a) All Article and Section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement (excluding any quoted language being substituted for provisions of the PSA), shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All references herein to Articles and Sections (excluding any quoted language being substituted for provisions of the PSA) shall, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement, respectively. All Disclosure Schedules and Exhibits attached hereto are hereby incorporated herein and in the PSA and made a part hereof and thereof for all purposes, and unless the context expressly requires otherwise, such Disclosure Schedules and such Exhibits are incorporated in the definition of “Agreement” and “PSA” (as amended hereby). All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders, and the singular shall include the plural and vice versa. The use herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation,” “but not limited to,” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.

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          (b) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law.
          (c) This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the parties hereto. Execution of this Agreement by an electronic form of signature that is an exact copy of the original signature shall be deemed to be, and shall have the same effect as, execution by original signature, and an electronic form counterpart of this Agreement signed by all parties hereto shall be sufficient to bind all such parties.
          (d) Except as modified herein, the parties hereby agree that the terms of the PSA (including the Schedules and Exhibits thereto) remains in full force and effect, and all references therein to the “Agreement” shall be deemed to mean the PSA as amended by this Agreement.
[Signature Pages Follow]

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     IN WITNESS WHEREOF, this First Amendment to Purchase and Sale Agreement has been duly executed and delivered by each party as of the date first above written.
             
    SELLER    
 
           
    EQUITRANS, L.P.
 
           
    By:   ET Blue Grass, LLC
        its general partner
 
           
 
      By:    /s/ Randall L. Crawford
 
      Name:  
 
 Randall L. Crawford
 
      Title:   Executive Vice President
         
    EQT (solely for the purpose of Section 1.8, 1.9,
4.17 and 9.15
of the PSA)
:
 
       
    EQT CORPORATION
 
       
 
  By:    /s/ Randall L. Crawford
 
  Name:  
 
 Randall L. Crawford
 
  Title:   Senior Vice President
Signature Page to First Amendment to Purchase and Sale Agreement

 


 

             
    BUYER :    
 
           
    SPECTRA ENERGY PARTNERS, LP, a Delaware
limited partnership
 
           
    By:   Spectra Energy Partners (DE) GP, LP,
        its general partner
 
           
        By: Spectra Energy Partners GP, LLC,
        its general partner
 
           
 
           By:    /s/ Gregory J. Rizzo
 
           Name:  
 
 Gregory J. Rizzo
 
           Title:   President and Chief Executive Officer
         
    SE Capital (solely for the purpose of Section 9.16
of the PSA)
:
 
       
    SPECTRA ENERGY CAPITAL, LLC,
    a Delaware limited liability company
 
       
 
  By:    /s/ Stephen W. Baker
 
  Name:  
 
 Stephen W. Baker
 
  Title:   Vice President and Treasurer
Signature Page to First Amendment to Purchase and Sale Agreement

 

Exhibit 99.1
(SPECTRA ENERGY LOGO)
     
Media
   
& Analysts:
  Derick Smith
 
  (713) 627-4963
 
   
Date:
  July 1, 2011
Spectra Energy Partners Completes Acquisition of the Big Sandy Pipeline
HOUSTON — Spectra Energy Partners, LP (NYSE: SEP) announced today that it has completed the previously announced acquisition of Big Sandy Pipeline, LLC (Big Sandy Pipeline) from EQT Corporation (NYSE: EQT). The primary asset acquired is a Federal Energy Regulatory Commission (FERC)-regulated natural gas pipeline system in eastern Kentucky. Big Sandy Pipeline has 171 million cubic feet per day of capacity and is approximately 70 miles in length, with access to Huron Shale and Appalachian Basin natural gas supplies.
“We are pleased Spectra Energy Partners closed the acquisition of the Big Sandy Pipeline, which strengthens our portfolio of fee-based natural gas assets. The acquisition was fully funded through equity and debt financing. Together with our quality assets and new investment grade credit ratings, we continue to be positioned for future opportunities,” said Gregory J. Rizzo, president and chief executive officer.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE), that owns interests in natural gas transportation and storage assets in the United States, including more than 3,200 miles of transmission and gathering pipelines and approximately 49 billion cubic feet (Bcf) of natural gas storage. These assets are capable of transporting 3.5 Bcf of natural gas per day from growing supply areas to high-demand markets.
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