$80 Million Bet On Triangle; The City Of Alexander Will See Huge Storage Complex

This was in the news yesterday. I missed it. Investors must have liked the news; TPLM up almost 5% today.

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Press release:

TPLM today announced that it has signed definitive agreements with joint venture partner First Reserve`s Energy Infrastructure Fund ("FREIF") to expand the Caliber Midstream Partners, L.P. ("Caliber") midstream and infrastructure system.

Expansion Project Details

• The expanded Caliber system will service all Triangle-operated acreage in McKenzie County, ND including recently acquired assets
  
  • Expansion service lines include crude oil stabilization and transportation, produced water transportation and disposal, and freshwater delivery services
    
• Expected to be in-service on or before June 1, 2014
  
• Expansion project includes a 50,000 bbl/d pipeline from the Caliber Central Facility to Alexander, ND, where Caliber plans to build 40,000 barrels of crude oil storage and related infrastructure, providing Triangle and other customers with access to multiple crude oil pipelines, rail terminals and market centers in the Williston Basin 
  

Financial Funding & Capital Structure Details

• FREIF will make an $80 million incremental equity investment
  
  • 8,000,000 Series A Units purchased at a price of $10.00 per unit
    
• Triangle is not committing any capital to the new equity round

Comments: Alexander is a very, very "city" south of Williston. To get an oil storage complex in that area for TPLM oil suggests to me that Triangle expects to be producing a lot of oil before this is all over.

It's very, very possible, this is just the beginning of a huge new oil company in western North Dakota. I assume other operators have similar storage complexes, but I don't read of many. So, we'll see. 

I have remarked before that TPLM is in a very, very good area of the Bakken.

Related news: TPLM adds acreage in the Bakken; see sidebar at the right for other deals in the Bakken.