Kinder Morgan Stock Rises On $640M Deal To Buy Natural Gas Processing System In North Dakota: Retail Sentiment Soars To Year-High

Kinder Morgan Inc. (KMI) shares rose over 1% on Monday after the energy infrastructure company said its subsidiary, Hiland Partners Holdings LLC, will purchase a natural gas gathering and processing system in North Dakota from Outrigger Energy II LLC for $640 million.

The deal also includes a 270 million cubic feet per day (MMcf/d) processing plant and rich gas header system in Williston Basin, North Dakota.

KMI Natural Gas Midstream President Tom Dender said the acquisition will enable the firm to efficiently expand its footprint and provide incremental transportation and processing services to meet the growing needs of our customers.

The company expects the acquisition to be immediately accretive to its shareholders, with 2025 adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) multiple of approximately eight times on a full-year basis.

KMI also expects to reduce future capital expenditures needed to accommodate the growth of its existing Bakken customers.

Initially, the firm plans to fund the transaction with short-term borrowings and cash.

On Stocktwits, retail sentiment jumped into the ‘extremely bullish’ territory from ‘bullish’ a week ago, hitting a one-year high. The move was accompanied by ‘extremely high’ retail chatter.

KMI’s Sentiment Meter and Message Volume as of 10:33 a.m. ET on Jan. 13, 2025 | Source: Stocktwits

Last month, KMI announced its expectations for 2025. The firm expects to generate $1.27 of adjusted earnings per share (EPS) and $8.3 billion of adjusted EBITDA.

The company expects to invest $2.3 billion in discretionary capital expenditures, including expansion projects and contributions to joint ventures, funded out of internally generated cash flow.

KMI expects to end 2025 with a net debt-to-adjusted EBITDA ratio of 3.8 times.

Meanwhile, Bank of America has raised the firm's price target on Kinder Morgan to $30 from $28 while keeping a ‘Buy’ rating on the shares. KMI shares have gained over 60% over the past year.

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