Atlas Pipeline Partners LP (NYSE: APL) is buying Teak Midstream LLC for $1 billion in cash.

Teak is a natural gas gathering and processing company with assets in the Eagle Ford shale play in south Texas. Atlas is buying a cryogenic processing plant and contracts.

Atlas secured the financing for the deal though a $400 million Series D convertible preferred issuance, as well as committed bank financing from Citigroup Inc. (NYSE: C) and Wells Fargo & Co. (NYSE: WFC).

Atlas owns and operates 13 gas processing plants, 18 gas treating facilities and gas gathering pipeline in Oklahoma, Kansas, Texas and Tennessee. The company also has a 20 percent interest in the West Texas LPG Pipeline LP, which is operated by Chevron Corp. (NYSE: CVX). The company is a subsidiary of Atlas Energy LP (NYSE: ATLS).

In April, Midstates Petroleum Co. Inc. (NYSE: MPO) bought oil properties in the Anadarko Basin in Texas and Oklahoma for $620 million, Penn Virginia bought properties in the Eagle Ford shale play for $400 million and in March, Rosetta Resources Inc. (Nasdaq: ROSE) bought Comstock Resources Inc.’s (NYSE: CRK) oil and gas properties in west Texas for $768 million.

Citigroup was Atlas’ financial adviser for the deal and acted as the sole placement agent for the convertible preferred issuance. Jones Day and Ledgewood acted as legal counsel.

For more on energy M&A, see "Fracking Fuels Energy Deals."

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