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, 2007
DCP MIDSTREAM PARTNERS, LP
(Exact name of registrant as specified in its charter)
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| Delaware
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001-32678
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03-0567133 |
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(Commission
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(IRS Employer |
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File Number)
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Identification No.) |
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| 370 17th Street, Suite 2775 |
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| Denver, Colorado
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80202 |
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(Zip Code) |
Registrant’s telephone number, including area code: (303) 633-2900
(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))
TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement.
On July 1, 2007, DCP Midstream Partners, LP (the “Partnership”) acquired from DCP Midstream,
LLC (“DCP LLC”), and two of its wholly-owned subsidiaries, DCP LP Holdings, LP (“Holdings”) and DCP
Midstream GP, LP (the “General Partner” and together with DCP LLC and Holdings referred to as
“DCP”) the following interests (the “Transaction”): (i) a 40% limited liability company interest in
Discovery Producer Services LLC, and (ii) a 25% limited liability company interest in DCP East
Texas Holdings, LLC (“East Texas”). The Transaction was completed in accordance with the Contribution Agreement,
dated May 23, 2007 (the “Contribution Agreement”), between the Partnership and DCP, previously
reported on the Partnership’s Current Report on Form 8-K dated May 25, 2007. The description of the
Contribution Agreement contained in the Form 8-K filed on May 25, 2007 is incorporated herein by
reference and the Contribution Agreement filed in such Form 8-K as Exhibit 10.1 is incorporated
herein by reference.
In connection with the Transaction, the Partnership or wholly-owned subsidiaries of the
Partnership, entered into the material definitive agreements described below in this item.
Omnibus Agreement Amendment
On July 1, 2007, in connection with the Transaction, DCP LLC, the Partnership, the General
Partner, DCP Midstream GP, LLC, and DCP Midstream Operating, LP, amended the Third Amendment to
Omnibus Agreement between the parties by entering into the Fourth Amendment to Omnibus Agreement
(the “Fourth Amendment”). The Fourth Amendment increases the annual fee the Partnership pays to DCP
LLC by $158,000 for incremental general and administrative expenses DCP LLC provides to the
Partnership.
The Fourth Amendment is attached as Exhibit 10.2 to this report and is incorporated by
reference into this report in its entirety.
East Texas LLC Agreement
In connection with the Transaction, as of July 1, 2007, DCP Assets Holding, LP, a wholly-owned
subsidiary of the Partnership, and DCP LLC, entered into the Amended and Restated Limited Liability
Company Agreement for East Texas (the “East Texas LLC Agreement”). This agreement governs the
ownership and management of East Texas.
The East Texas LLC Agreement provides for the management of East Texas by a management
committee consisting of representatives of the members. The representatives to the management
committee will have voting power that corresponds to the ownership interest of the owner they
represent. Except for certain significant matters that are specified in the East Texas LLC
Agreement, all actions and decisions relating to East Texas require the approval of the management
committee representatives that represent a majority interest. East Texas is required under the East
Texas LLC Agreement to make distributions of available cash at least quarterly to its owners. The
management committee, by majority approval, will determine the amount of such distributions. DCP
LLC will be the operator of East Texas in accordance with the East Texas LLC Agreement. Under the
East Texas LLC Agreement, East Texas will be required to reimburse DCP LLC as the operator for all
direct and indirect expenses it incurs or payments its makes on behalf of East Texas and all other
expenses allocable to East Texas or otherwise incurred by East Texas in connection with operating
East Texas’ business.
Both members of East Texas will be subject to reciprocal rights of first offer under the East
Texas LLC Agreement. Accordingly, prior to selling all or a portion of its respective interest in
East Texas, that member will be required to first offer its membership interest to the other
member.
The East Texas LLC Agreement is attached as Exhibit 10.3 to this report and is incorporated by
reference into this report in its entirety.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On July 1, 2007, the Partnership completed the Transaction, as described in Item 1.01 and
3.02 of this report which are incorporated by reference into this item in their entirety. The total
purchase price paid by the Partnership in the Transaction was approximately $272.3 million
consisting of (i) $27.0 million worth of the Partnership’s common units representing 620,404 common
units, (ii) $0.6 million worth of the Partnership’s general partner equivalent units representing
12,661 general partner equivalent units, and (iii) $244.7 million in cash. The Partnership financed
the cash portion of the purchase price with the Partnership’s existing credit facility and intends
to ultimately fund the Transaction with a combination of debt and equity. The purchase price is
subject to standard closing adjustments.
DCP LLC and its affiliates own directly or indirectly approximately 37.4% of the limited
partner units of the Partnership, and own 100% of the General Partner of the Partnership. These
affiliations create a conflict of interest in the General Partner. As a result of this conflict,
the board of directors of DCP Midstream GP, LLC, the general partner of the General Partner,
submitted the Transaction for resolution of the conflict to the conflicts committee of the board of
directors, a committee consisting entirely of independent directors. Acting pursuant to the
provisions of the partnership agreement of the Partnership, the conflicts committee reviewed the
Transaction and, with the assistance of independent financial and legal advisors, determined that
the Transaction was fair to the Partnership, approved the Transaction and recommended approval of
the Transaction to the full board of directors. After receiving the approval and recommendation of
the conflicts committee, the board of directors approved the Transaction.
The description of the Contribution Agreement contained in the Form 8-K filed on May 25, 2007
is incorporated herein by reference and the Contribution Agreement filed in such Form 8-K as
Exhibit 10.1 is incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
On July 1, 2007, the Partnership issued approximately $27.0 million of the Transaction
consideration to Holdings in the form of 620,404 common units representing limited partner
interests in the Partnership. The private placement of these common units with Holdings pursuant to
the Contribution Agreement is being made in reliance upon an exemption from the registration
requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof.
Item 7.01. Regulation FD Disclosure.
On July 2, 2007, the Partnership issued a press release announcing the Transaction. A
copy of the press release is furnished and attached as Exhibit 99.2 hereto and is incorporated
herein by reference.
A copy of the press release is being furnished and is attached as Exhibit 99.2 hereto and
incorporated into this Item 7.01 by reference. In accordance with General Instruction B.2 of Form
8-K, the press release shall not be deemed “filed” for the purpose of Section 18 of the Exchange
Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such
information and Exhibit be deemed incorporated by reference into any filing under the Securities
Act of 1933 or Exchange Act of 1934, each as amended, except as shall be expressly set forth by
specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
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(a) |
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Financial statements of businesses acquired. |
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Audited consolidated financial statements of Discovery
Producer Services LLC as of December 31, 2006 and 2005, and
for the years ended December 31, 2006, 2005 and 2004, and
unaudited consolidated financial statements of Discovery
Producer Services LLC as of March 31, 2007, and for the
three months ended March 31, 2007 and 2006, are attached
hereto as Exhibit 99.3, and are incorporated herein by
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Audited combined financial statements of The East Texas
Midstream Business as of December 31, 2006 and 2005, and
for the years ended December 31, 2006, 2005 and 2004, and
unaudited combined financial statements of the East Texas
Midstream Business as of March 31, 2007, and for the three
months ended March 31, 2007 and 2006, are attached hereto
as Exhibit 99.4, and are incorporated herein by reference. |
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(b) |
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Pro forma financial information. |
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The unaudited pro forma condensed consolidated financial
statements of the Partnership as of March 31, 2007, and for the
three months ended March 31, 2007, and for the years ended
December 31, 2006, 2005 and 2004, are attached hereto as
Exhibit 99.5, and are incorporated herein by reference. |
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(c) |
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Not applicable. |
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(d) |
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Exhibits. |