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): March 28, 2014
DCP MIDSTREAM PARTNERS, LP
(Exact name of registrant as specified in its charter)
|
|
|
|
|
|
|
|
|
Delaware
|
|
001-32678
|
|
03-0567133
|
|
(State or other jurisdiction
of incorporation)
|
|
(Commission
File Number)
|
|
(IRS Employer
Identification No.)
|
370 17th Street, Suite 2500
Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
(303) 633-2900
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
|
|
|
|
|
|
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))
|
Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Contribution Agreement
On March 28, 2014, DCP Midstream Partners, LP (the “Partnership”) entered into the Second Amendment (the “Contribution Agreement Amendment”) to the previously disclosed Contribution Agreement, dated February 25, 2014, among DCP LP Holdings, LLC (“Holdings”), DCP Midstream GP, LP (the “General Partner”), DCP Midstream, LLC (“Midstream”), and the Partnership (as previously amended, the “Contribution Agreement”). The Contribution Agreement Amendment modifies the closing date of the transaction contemplated by the Contribution Agreement to March 31, 2014, deletes a provision therein that is no longer applicable, and replaces certain schedules thereto regarding reserved liabilities, litigation, and financial statements.
The foregoing description of the Contribution Agreement Amendment is not complete and is qualified in its entirety by reference to the full and complete terms of the Contribution Agreement Amendment, a copy of which is attached to this Current Report on Form 8-K as Exhibit 2.1.
Amendment to Services Agreement
On March 31, 2014, in connection with the completions of the Contribution described in Item 2.01 below and the previously announced acquisition of each of the Lucerne 1 and Lucerne 2 natural gas processing plants, the Partnership entered into the Second Amendment (the “Services Agreement Amendment”) to the previously disclosed Services Agreement, dated February 14, 2013, by and between the Partnership and DCP Midstream, LP (“Midstream LP”). The Services Agreement Amendment increases the annual limit on the amount of expenses that the Partnership reimburses to Midstream LP by approximately $15 million (prorated for the remainder of the calendar year) to approximately $44 million for incremental general and administrative services that Midstream LP will provide to the Partnership during calendar year 2014, thereafter subject to an annual adjustment based on the Consumer Price Index. The predominant amount of the approximately $15 million increase is attributable to the general and administrative fee that the Partnership previously paid to DCP SC Texas GP being reallocated to the Services Agreement in connection with the Partnership now owning 100% of the outstanding partnership interests in DCP SC Texas GP, as discussed below. The Services Agreement Amendment was approved by the conflicts committee (the “Conflicts Committee”) of the Board of Directors of DCP Midstream GP, LLC (“GP LLC”), the general partner of the General Partner, the general partner of the Partnership, as required by the Partnership’s partnership agreement.
The foregoing description of the Services Agreement Amendment is not complete and is qualified in its entirety by reference to the full and complete terms of the Services Agreement Amendment, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On March 31, 2014, the Partnership completed the transaction contemplated by the Contribution Agreement, as amended to date, in which Holdings, the General Partner, and Midstream contributed to the Partnership (i) a 33.33% membership interest in each of two separate NGL pipeline entities, DCP Southern Hills Pipeline, LLC (“Southern Hills”) and DCP Sand Hills Pipeline, LLC (“Sand Hills”) and (ii) the remaining 20% interest in DCP SC Texas GP, an entity in which the Partnership now owns 100% of the outstanding partnership interests (collectively, the “Contribution”).
The aggregate consideration for the Contribution was $1,120 million, plus customary working capital adjustments. $895 million of the consideration was funded with a portion of the net proceeds from the Partnership’s recent equity and senior notes offerings. The remaining $225 million of the consideration was funded by the issuance at closing of 1,399,116 common units representing limited partnership interests in the Partnership (the “Common Units”) to Holdings, 999,368 Common Units to the General Partner, and 2,098,674 Common Units to Midstream. The Common Units were issued in a private placement in reliance upon an exemption from the registration requirements
of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and the safe harbor provided by Rule 506 of Regulation D promulgated thereunder.
Southern Hills is engaged in the business of transporting natural gas liquids (“NGLs”), and consists of approximately 800 miles of pipeline, with an expected capacity of 175 MBbls/d after completion of planned pump stations. Southern Hills provides NGL takeaway service from the Midcontinent to fractionation facilities along the Mont Belvieu, Texas market hub. The Southern Hills pipeline began taking flows in the first quarter of 2013 and was placed into service in June 2013.
Sand Hills is also engaged in the business of transporting NGLs. Sand Hills consists of approximately 720 miles of pipeline, with an expected initial capacity of 200 MBbls/d after completion of pump stations. Sand Hills provides NGL takeaway service from the Permian and Eagle Ford basins to fractionation facilities along the Texas Gulf Coast and the Mont Belvieu, Texas market hub. The Sand Hills pipeline began taking flows in the fourth quarter of 2012 and was placed into service in June 2013.
DCP SC Texas GP consists of six cryogenic natural gas processing plants, including the Goliad plant that was placed into service in February 2014, with total capacity of approximately 960 MMcf/d, three NGL fractionators, and approximately 6,000 miles of natural gas gathering transmission lines.
Midstream indirectly owns 100% of Holdings and also directly owns 100% of GP LLC, the general partner of the General Partner, the general partner of the Partnership. The Conflicts Committee, a committee of independent members of the Board of Directors of GP LLC, retained independent legal and financial advisers to assist it in evaluating the Contribution. Accordingly, the Conflicts Committee approved the Contribution.
Item 3.02 Unregistered Sales of Equity Securities.
The information regarding the issuance of the Common Units to Holdings, the General Partner, and Midstream set forth in Item 2.01 above is incorporated in its entirety herein by reference.
Item 7.01 Regulation FD Disclosure.
The Partnership issued a press release on April 1, 2014 announcing the completion of the Contribution and the acquisition of each of the Lucerne 1 and Lucerne 2 natural gas processing plants. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated into this Item 7.01 by reference.
In accordance with General Instruction B.2 of Form 8-K, the press release furnished as Exhibit 99.1 to this Current Report on Form 8-K shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information or exhibit be deemed incorporated by reference into any filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except as shall be expressly set forth by specific reference in any such filing.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The financial statements listed below related to Southern Hills and Sand Hills, which were included in the Partnership’s Current Report on Form 8-K filed on February 26, 2014, are incorporated herein by reference.
Audited financial statements of DCP Southern Hills Pipeline, LLC as of and for the years ended December 31, 2013 and 2012, and for the period from inception (June 21, 2011) to December 31, 2011
Audited financial statements of DCP Sand Hills Pipeline, LLC as of and for the years ended December 31, 2013 and 2012, and for the period from inception (February 2, 2011) to December 31, 2011
(b) Pro forma financial information.
The pro forma financial information of the Partnership listed below, which was included in the Partnership’s Current Report on Form 8-K filed on February 26, 2014, is incorporated herein by reference.
Unaudited pro forma condensed consolidated financial statements of the Partnership as of and for the year ended December 31, 2013
(c) Not applicable.
|
|
|
|
|
|
|
(d) Exhibits.
|
|
|
|
|
|
|
|
Exhibit Number
|
|
Description
|
|
|
|
|
|
2.1
|
*
|
Second Amendment to Contribution Agreement, dated March 28, 2014, among DCP LP Holdings, LLC, DCP Midstream GP, LP, DCP Midstream, LLC, and DCP Midstream Partners, LP.
|
|
|
|
|
|
10.1
|
|
Second Amendment to Services Agreement, dated March 31, 2014, by and between DCP Midstream Partners, LP and DCP Midstream, LP.
|
|
|
|
|
|
99.1
|
|
Press Release, dated April 1, 2014.
|
|
|
|
|
|
* Pursuant to Item 601(b)(2) of Regulation S-K, the Partnership agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.
|
SIGNATURE
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.
|
|
|
|
|
|
|
|
Dated: April 2, 2014
|
DCP MIDSTREAM PARTNERS, LP
|
|
|
|
|
|
By:
DCP MIDSTREAM GP, LP
|
|
|
its General Partner
|
|
|
|
|
|
By:
DCP MIDSTREAM GP, LLC
|
|
|
its General Partner
|
|
|
|
|
|
By:
/s/ Michael S. Richards
|
|
|
Name: Michael S. Richards
|
|
|
Title: Vice President, General Counsel, and Secretary
|
EXHIBIT INDEX
|
|
|
|
|
|
|
Exhibit Number
|
|
Description
|
|
|
|
|
|
2.1
|
*
|
Second Amendment to Contribution Agreement, dated March 28, 2014, among DCP LP Holdings, LLC, DCP Midstream GP, LP, DCP Midstream, LLC, and DCP Midstream Partners, LP.
|
|
|
|
|
|
10.1
|
|
Second Amendment to Services Agreement, dated March 31, 2014, by and between DCP Midstream Partners, LP and DCP Midstream, LP.
|
|
|
|
|
|
99.1
|
|
Press Release, dated April 1, 2014.
|
|
|
|
|
|
* Pursuant to Item 601(b)(2) of Regulation S-K, the Partnership agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.
|
SECOND AMENDMENT TO CONTRIBUTION AGREEMENT
This Second Amendment to Contribution Agreement (the “
Amendment
”) is made and entered into the 28
th
day of March, 2014 among DCP LP Holdings, LLC, a Delaware limited liability company (“
HOLDINGS
”), DCP Midstream GP, LP, a Delaware limited partnership (“
GP
”), DCP Midstream, LLC, a Delaware limited liability company (“
MIDSTREAM
”), and DCP Midstream Partners, LP, a Delaware limited partnership (“
MLP
”). Capitalized terms used herein but not defined shall have the meaning assigned to those terms in the Contribution Agreement.
|
|
|
|
A.
|
HOLDINGS, GP, MIDSTREAM and MLP are parties to that certain Contribution Agreement dated February 25, 2014 (the “
Contribution Agreement
”).
|
|
|
|
|
B.
|
The Contribution Agreement was amended by the First Amendment to Contribution Agreement dated February 27, 2014.
|
|
|
|
|
C.
|
The parties desire to further amend the Contribution Agreement as provided herein.
|
FOR GOOD AND VALUABLE CONSIDERATION
, the parties hereto agree as follows:
|
|
|
|
1.
|
Schedule 1.1(d)
(concerning Reserved Liabilities) to the Contribution Agreement is hereby replaced with the
Schedule 1.1(d)
that is attached hereto as Attachment I.
|
|
|
|
|
2.
|
Section 2.1(c)
to the Contribution Agreement is hereby deleted in its entirety.
|
|
|
|
|
3.
|
Schedule 4.6
(concerning Litigation) to the Contribution Agreement is hereby replaced with the
Schedule 4.6
that is attached hereto as Attachment II.
|
|
|
|
|
4.
|
Schedule 4.21
(concerning Financial Statements) to the Contribution Agreement is hereby replaced with the
Schedule 4.21
that is attached hereto as Attachment III.
|
|
|
|
|
5.
|
Section 8.1
of the Contribution Agreement is amended to change the Closing Date to March 31, 2014.
|
|
|
|
|
6.
|
Except as modified and amended herein, the terms and provisions of the Contribution Agreement shall remain in full force and effect.
|
|
|
|
|
7.
|
This Amendment may be signed in any number of counterparts, all of which together shall constitute a single signed original. Facsimiles and photocopies of this Amendment shall have the same force and effect as a signed original.
|
[SIGNATURES BEGIN ON NEXT PAGE]
THE PARTIES HERETO
have executed this Amendment to be effective as of the date first above written, notwithstanding the actual date of execution.
DCP LP HOLDINGS, LLC
By:
/s/ D. Robert Sadler
Name:
D. Robert Sadler
Title:
Vice President
DCP MIDSTREAM GP, LP
By: DCP MIDSTREAM GP, LLC
Its general partner
By:
/s/ William S. Waldheim
Name:
William S. Waldheim
Title:
President
DCP MIDSTREAM, LLC
By:
/s/ D. Robert Sadler
Name:
D. Robert Sadler
Title:
Vice President
DCP MIDSTREAM PARTNERS, LP
By: DCP MIDSTREAM GP, LP
Its general partner
By: DCP MIDSTREAM GP, LLC
Its general partner
By:
/s/ William S. Waldheim
Name:
William S. Waldheim
Title:
President
[Pursuant to Item 601(b)(2) of Regulation S-K, the schedules to the Amendment have been omitted from this Exhibit 2.1. The Partnership agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.]
SECOND AMENDMENT
TO
SERVICES AGREEMENT
This Second Amendment to Services Agreement (this “
Amendment
”) is dated as of March 31, 2014 and entered into by and between DCP Midstream, LP, a Delaware limited partnership (“
Service Provider
”) and DCP Midstream Partners, LP, a Delaware limited partnership (“
Owner
”). Service Provider and Owner are sometimes referred to in this Amendment individually as a “
Party
” and collectively as the “
Parties
”.
RECITALS
|
|
|
|
A.
|
The Parties entered into that certain Services Agreement dated as of February 14, 2013, as amended by the First Amendment to Services Agreement dated as of August 5, 2013 (the “
Services Agreement
”) (capitalized terms used but not defined herein shall have the meaning given thereto in the Services Agreement).
|
|
|
|
|
B.
|
The Parties desire to amend the Services Agreement to increase the G&A Expenses Limit as provided for in Section 2.5 of the Services Agreement to account for the sale of the Membership Interests in DCP Lucerne 1 Plant LLC and DCP Lucerne 2 Plant LLC in a Purchase and Sale Agreement dated as of February 25, 2014 from Service Provider or one of its Affiliates to the Owner (the “
PSA
”) and the sale of the Membership Interests in DCP SC Texas Holdings LLC, DCP Pipeline Holding LLC and its 33.330% interest in DCP Southern Hills Pipeline, LLC from Service Provider or one of its Affiliates to the Owner in a Contribution Agreement dated as of February 25, 2014 (the “
CA
”) which are referred to together herein and in Schedule A as “Project Onyx”.
|
FOR GOOD AND VALUABLE CONSIDERATION,
the receipt and sufficiency of which is hereby acknowledge, the Parties hereby agree as follows:
|
|
|
|
1.
|
Services Agreement Schedule Amendment
. Schedule A to the Services Agreement is replaced with the Schedule A attached hereto as
Attachment I.
|
|
|
|
|
2.
|
Acknowledgement
. Except as amended hereby, the Services Agreement shall remain in full force and effect as previously executed, and the Parties hereby ratify the Services Agreement as amended hereby.
|
|
|
|
|
3.
|
Counterparts
. This Amendment may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties hereto and delivered (including by facsimile) to the other Parties.
|
EACH OF THE UNDERSIGNED,
intending to be legally bound, has caused this Amendment to be duly executed and delivered to be effective as of March 31, 2014, regardless of the actual date of execution of this Amendment.
DCP MIDSTREAM, LP
By:
/s/ Brent L. Backes
Name: Brent L. Backes
Title: Group Vice President, General Counsel & Corporate Secretary
DCP MIDSTREAM PARTNERS, LP
By: DCP MIDSTREAM GP, LP, its general partner
By: DCP MIDSTREAM GP, LLC, its general partner
By:
/s/ Michael S. Richards
Name: Michael S. Richards
Title: Vice President, General Counsel & Secretary
Signature Page to Second Amendment to Services Agreement
ATTACHMENT I
SCHEDULE A
G&A EXPENSES LIMIT
For 2014 the G&A Expenses Limit shall be $29,455,000 plus an additional $14,950,000 per year for Project Onyx, pro-rated for the remainder of calendar year 2014 from the Effective Date, as such term is defined in the PSA or CA.
DCP MIDSTREAM AND DCP MIDSTREAM PARTNERS CLOSE ON THE PREVIOUSLY ANNOUNCED DROPDOWN AND ORGANIC GROWTH PROJECT TOTALING $1.4 BILLION
DENVER, April 1, 2014 — DCP Midstream Partners, LP (NYSE: DPM), or the Partnership, announced today it has completed the previously announced $1.15 billion immediately accretive dropdown from the owner of its general partner, DCP Midstream, LLC ("DCP Midstream"). The transaction, which is subject to certain working capital and other purchase price adjustments, was financed at closing with proceeds from the Partnership’s recent equity and debt issuances. DCP Midstream received approximately 80 percent of the consideration in cash and approximately 20 percent in the Partnership's common units. DCP Midstream will use the proceeds from this transaction to pay down short term borrowings.
Included in the dropdown are the following:
|
|
|
|
•
|
A one-third interest in the 720-mile, fee-based Sand Hills natural gas liquids (NGL) pipeline, transporting NGLs from both DCP and third party plants in the Permian Basin and Eagle Ford Shale to facilities along the Texas Gulf Coast and the Mont Belvieu market hub.
|
|
|
|
|
•
|
A one-third interest in the 800-mile, fee-based Southern Hills NGL pipeline, providing NGL takeaway service from the Midcontinent to the Mont Belvieu market hub.
|
|
|
|
|
•
|
The remaining 20 percent interest in the Eagle Ford system, bringing the Partnership's ownership interest to 100 percent.
|
|
|
|
|
•
|
Lucerne 1, a 35 million cubic feet per day (MMcf/d) cryogenic natural gas processing plant located in the DJ Basin. The plant includes a long-term fee-based processing agreement with DCP Midstream providing a fixed demand charge, along with a throughput fee on all volumes processed.
|
“This is another great example of strong sponsorship and how the DCP enterprise is executing our growth for growth strategy,” said Wouter van Kempen, chairman, president and CEO of DCP Midstream, and chairman and CEO of the Partnership.
"The completion of this transaction provides the Partnership with diversity into new basins, now accessing the Permian Basin via Sand Hills NGL pipeline and Granite Wash and SCOOP areas of the Midcontinent via Southern Hills NGL pipeline, and grows our footprint in the prolific DJ Basin," said Bill Waldheim, president of the Partnership. “These predominantly fee-based assets position the Partnership well to provide sustainable distribution growth and long-term value to our unitholders.”
The Partnership also closed on Lucerne 2, a 200 MMcf/d plant which is currently under construction. Once in service, the plant includes a 10-year fee-based processing agreement with DCP Midstream
providing a fixed demand charge, along with a throughput fee on all volumes processed. Lucerne 2 will be a deep-cut cryogenic, natural gas processing plant in the rapidly expanding, liquids-rich DJ Basin that is part of the growing Niobrara shale formation. Once in service, the Partnership will own approximately 50 percent of the 800 MMcf/d of total capacity in the DJ Basin owned and operated by the DCP enterprise. The Lucerne plants will be connected to the Front Range NGL pipeline for takeaway to the Mont Belvieu market hub. Lucerne 2 is expected to be placed into service in mid 2015. The Partnership estimates additional expenditures of approximately $180 million to complete this project, for a total estimated cost of $250 million.
|
|
|
|
|
|
MEDIA RELATIONS:
|
Lisa Newkirk
|
|
Phone:
|
303-605-1837
|
|
24-Hour:
|
303-829-1953
|
|
|
|
|
INVESTOR RELATIONS:
|
Andrea Attel
|
|
Phone:
|
303-605-1741
|
ABOUT DCP MIDSTREAM, LLC
DCP Midstream, LLC leads the midstream segment as the largest natural gas processor, the largest natural gas liquids producer and one of the largest marketers in the U.S. DCP Midstream operates in 18 states across major producing regions. The company is a 50:50 joint venture between Phillips 66 and Spectra Energy. It owns the general partner of DCP Midstream Partners, LP (NYSE: DPM), a master limited partnership, and provides operational and administrative support to the partnership. DCP Midstream is the largest oil and gas company and the largest private company in Denver, the city of its headquarters, and is the Top Company Winner for Energy/Natural Resources in Colorado as recognized by ColoradoBiz. For more information, visit the DCP Midstream website at www.dcpmidstream.com.
ABOUT DCP MIDSTREAM PARTNERS, LP
DCP Midstream Partners, LP (NYSE: DPM) is a midstream master limited partnership engaged in the business of gathering, compressing, treating, processing, transporting, storing and selling natural gas; producing, fractionating, transporting, storing and selling NGLs and condensate; and transporting, storing and selling propane in wholesale markets. DCP Midstream Partners, LP is managed by its general partner, DCP Midstream GP, LP, which in turn is managed by its general partner, DCP Midstream GP, LLC, which is wholly-owned by DCP Midstream, LLC, a joint venture between Phillips 66 and Spectra Energy. For more information, visit the DCP Midstream Partners, LP website at www.dcppartners.com.
CAUTIONARY STATEMENTS
This press release contains forward-looking statements as defined under the federal securities laws regarding DCP Midstream Partners, LP, including projections, estimates, forecasts, plans and objectives. Although management believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond DCP
Midstream Partners, LP’s control. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may vary materially from what management anticipated, estimated, projected or expected.
Investors are encouraged to closely consider the disclosures and risk factors contained in DCP Midstream Partners, LP's annual and quarterly reports filed from time to time with the Securities and Exchange Commission.The forward looking statements contained herein speak only as of the date of this announcement. DCP Midstream Partners, LP undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.