Targa Resources to Acquire Lucid Energy for $3.55 Billion

Targa Resources Corp., June 17, 2022

Targa Resources Corp. (“Targa” or the “Company”) and Lucid Energy Group, a leading privately held natural gas processor in the Permian Basin, announced today a definitive agreement under which a wholly-owned subsidiary of Targa will acquire Lucid Energy Delaware, LLC (“Lucid”) from Riverstone Holdings LLC (“Riverstone”) and Goldman Sachs Asset Management (“Goldman Sachs”), for $3.55 billion in cash.

Lucid provides natural gas gathering, treating, and processing services in the Delaware Basin, including approximately 1,050 miles of natural gas pipelines and approximately 1.4 billion cubic feet per day (“Bcf/d”) of cryogenic natural gas processing capacity in service or under construction located primarily in Eddy and Lea counties of New Mexico. Lucid’s Delaware Basin footprint overlays some of the most economic crude oil and natural gas producing acreage in North America. Current rig activity supports over 20 years of drilling inventory on Lucid’s greater than 600,000 dedicated acres, which are further supplemented by significant volumes subject to minimum volume commitments. Lucid’s assets are anchored by long-term, fixed-fee contracts and acreage dedications from a diverse set of high-quality customers. Approximately 70 percent of current system volumes are sourced from investment grade producers.

Targa’s standalone 2022 financial and operational outlook has continued to improve given the strength of commodity markets and producer activity levels. The Company now estimates full year standalone adjusted EBITDA to be between $2.675 billion and $2.775 billion and reported year-end leverage ratio of about 2.7 times. Targa’s updated financial expectations assume natural gas liquids (“NGL”) composite prices average $1.05 per gallon, crude oil prices average $100 per barrel and Waha natural gas prices average $6.00 per million British Thermal Units (“MMbtu”) for the remainder of 2022.

The strength of Targa’s standalone financial position has afforded us the flexibility to consider attractive opportunities to grow our business through acquisitions, as evidenced by our ability to finance the purchase of Lucid utilizing available cash and debt with estimated pro forma year-end 2022 leverage around 3.5 times, well within our long-term leverage ratio target range,” said Matt Meloy, Chief Executive Officer of Targa. “Lucid’s management team has developed an attractive position in the Delaware Basin and we look forward to continuing to provide value added services to the producer customers. This is an exciting acquisition that aligns with our integrated strategy as we are expanding and diversifying our Permian Basin footprint with Lucid’s complementary presence at an attractive investment multiple that we expect will further enhance the creation of shareholder value and continue to drive more volumes through Targa’s downstream businesses.

The acquisition is expected to be immediately accretive to distributable cash flow per share. This acquisition further supports our already strong cash flow profile and ability to return an increasing amount of capital to our shareholders through common dividend increases and common share repurchases,” added Meloy.

Over the past several years, Lucid has firmly established itself as a leading midstream processor in the Delaware Basin, with a talented team, sophisticated operations and infrastructure, and strong customer partnerships,” said Mike Latchem, CEO of Lucid Energy. “I am immensely proud of what we have achieved, as today’s transaction is a testament to the commitment and expertise of our team members and our strategy of growing the business for the benefit of all stakeholders. On behalf of Lucid, I want to express our gratitude to our sponsors, Riverstone and Goldman Sachs, whose partnership was instrumental in building the platform and helping to position the company for its next chapter of success.

We congratulate Mike Latchem and the entire Lucid team on today’s milestone,” said Baran Tekkora, a Partner at Riverstone and Co-Head of Private Equity. “The transaction with Targa will position Lucid for its next stage of growth, while creating enhanced opportunities for its employees, customers and communities. Riverstone is pleased to have executed its strategy of partnering with Goldman Sachs and Lucid’s exceptional management team, where the combination of our capital and industry expertise resulted in strong returns for all stakeholders. Since the joint acquisition of Lucid in 2018, Lucid has significantly grown volumes and EBITDA and has differentiated itself as a highly sought-after midstream operator with a best-in-class safety and environmental track record.

We are pleased to have partnered with Lucid and Riverstone over the last several years, as the company has continued its growth as a leading gas gathering and processing platform in the Delaware Basin,” said Scott Lebovitz, Partner and Co-Head of the Infrastructure investing business within Goldman Sachs Asset Management. “We believe Mike and the team have done a great job of expanding customer relationships with high quality producers in the basin while continuing their commitment to the environment, safety, and the communities they serve.

About Targa Resources Corp. 

Targa Resources Corp. (NYSE: TRGP) is a leading provider of midstream services and is one of the largest independent midstream infrastructure companies in North America. The Company owns, operates, acquires and develops a diversified portfolio of complementary domestic midstream infrastructure assets and its operations are critical to the efficient, safe and reliable delivery of energy across the United States and increasingly to the world. The Company’s assets connect natural gas and NGLs to domestic and international markets with growing demand for cleaner fuels and feedstocks. The Company is primarily engaged in the business of: gathering, compressing, treating, processing, transporting, and purchasing and selling natural gas; transporting, storing, fractionating, treating, and purchasing and selling NGLs and NGL products, including services to LPG exporters; and gathering, storing, terminaling, and purchasing and selling crude oil. Targa is a FORTUNE 500 company and is included in the S&P 400. For more information, please visit the Company’s website at

About Lucid Energy Group 

Lucid Energy Group is the largest privately held natural gas processor in the Permian Basin, providing the full range of gas midstream services to more than 50 customers in New Mexico and West Texas. Lucid is supported by growth capital commitments from a joint venture formed by Riverstone Global Energy and Power Fund VI, L.P., an investment fund managed by Riverstone Holdings LLC, and investment funds managed by Goldman Sachs Asset Management. Please visit for more information.

Click here to read the full article from Targa Resources Corp..

Comments and Discussion

There are no comments yet.

Add a Comment

Please log in or register to participate in comments and discussions.

Inspectioneering Journal

Explore over 20 years of articles written by our team of subject matter experts.

Company Directory

Find relevant products, services, and technologies.

Training Solutions

Improve your skills in key mechanical integrity subjects.

Case Studies

Learn from the experience of others in the industry.


Inspectioneering's index of mechanical integrity topics – built by you.

Industry News

Stay up-to-date with the latest inspection and asset integrity management news.


Read short articles and insights authored by industry experts.

Expert Interviews

Inspectioneering's archive of interviews with industry subject matter experts.

Event Calendar

Find upcoming conferences, training sessions, online events, and more.


Downloadable eBooks, Asset Intelligence Reports, checklists, white papers, and more.

Videos & Webinars

Watch educational and informative videos directly related to your profession.


Commonly used asset integrity management and inspection acronyms.