MarkWest Energy Partners Announces Sale of Marcellus Shale Gathering Assets in West Virginia to Summit Midstream Partners
DENVER--(BUSINESS WIRE)-- MarkWest Energy Partners, L.P. (NYS: MWE) (MarkWest) and Summit Midstream Partners, LP (NYS: SMLP) (Summit) announced today the execution of definitive agreements whereby Summit will acquire certain gas gathering assets from MarkWest in Doddridge County, West Virginia for $210 million in cash. Rich-gas gathered by these assets is dedicated to MarkWest for processing at the Sherwood complex, also located in Doddridge County, West Virginia. The transaction is expected to close in June 2013.
The assets included in this transaction consist of over 40 miles of newly constructed high-pressure gas gathering pipelines, certain rights-of-way associated with the pipeline, and two compressor stations totaling over 21,000 horsepower of combined compression. The rich-gas gathering and compression system is supported by a long-term, fee-based contract with an affiliate of Antero Resources Corporation (Antero), anchor producer at MarkWest's Sherwood processing complex. Antero is a leading Marcellus Shale producer with over 312,000 net acres in the southwestern core of the play. In northern West Virginia, Antero has 14 drilling rigs currently in operation and has access to 400 million cubic feet per day (MMcf/d) of fully dedicated cryogenic processing capacity at the Sherwood complex. In order to support Antero's rapidly growing rich-gas production, MarkWest expects to install two additional plants at the Sherwood complex by mid-2014, bringing total processing capacity to 800 MMcf/d.
Summit's acquisition of premier gathering infrastructure from MarkWest will further enhance its presence as a leading growth-oriented midstream energy company focused on developing, owning and operating strategically located assets in North America's growing unconventional resource basins. This transaction represents Summit's entry into the largest producing shale play in the U.S. and a highly prospective growth opportunity, supported by significant rich-gas production from Antero and potential future producers. This acquisition further enhances Summit's scale to execute its growth strategy and provides greater geographic and customer diversification.
The proceeds from this transaction will provide MarkWest with additional financial flexibility to fund growth capital investments associated with more than 18 previously announced major midstream infrastructure projects primarily in the Marcellus and Utica Shales. By the end of 2014, MarkWest is expected to have over 4 billion cubic feet per day of processing capacity and 275,000 barrels per day of fractionation capacity in the heart of two of America's most prolific shale plays.
Jefferies LLC acted as MarkWest's exclusive financial advisor and Barclays Capital, Inc. acted as Summit's exclusive financial advisor in connection with this transaction.
"Summit is a high quality midstream operator and we are pleased to announce the sale of our rich gas gathering system in Doddridge County," said Frank Semple, Chairman, President and Chief Executive Officer of MarkWest. "This transaction provides MarkWest with ongoing financial flexibility to support our large set of processing, fractionation and NGL transportation projects that are currently being developed in the Marcellus and Utica Shales."
Steve Newby, President and Chief Executive Officer of Summit, commented, "The Sherwood asset acquisition represents Summit's initial entry into the Marcellus Shale, one of the largest, most active and prolific basins in North America. We are excited about establishing a footprint in this world-class basin and beginning a strategic relationship with MarkWest. We look forward to working with MarkWest on this and future opportunities to expand this relationship and complement its industry leading position in the Marcellus and Utica."
About MarkWest Energy Partners, L.P.
MarkWest Energy Partners, L.P. is a master limited partnership engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of natural gas liquids; and the gathering and transportation of crude oil. MarkWest has a leading presence in many unconventional gas plays including the Marcellus Shale, Utica Shale, Huron/Berea Shale, Haynesville Shale, Woodford Shale and Granite Wash formation.
About Summit Midstream Partners, LP
SMLP is a growth-oriented limited partnership focused on owning and operating midstream energy infrastructure assets that are strategically located in the core producing areas of unconventional resource basins, primarily shale formations, in North America. Pro forma for the Bison and Marcellus asset acquisitions, SMLP currently provides primarily fee-based natural gas gathering and compression services in four unconventional resource basins: (i) the Piceance Basin, which includes the Mesaverde formation as well as the Mancos and Niobrara shale formations in western Colorado; (ii) the Fort Worth Basin, which includes the Barnett Shale formation in north-central Texas; (iii) the Williston Basin, which includes the Bakken and Three Forks shale formations in northwestern North Dakota; and (iv) the Appalachian Basin, which includes the Marcellus Shale formation in northern West Virginia. SMLP owns and operates approximately 747 miles of pipeline and 180,610 horsepower of compression. SMLP is headquartered in Dallas, TX with offices in Houston, TX, Denver, CO and Atlanta, GA.
Forward Looking Statements
MarkWest Energy Partners, L.P.:
This press release includes "forward-looking statements." All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. Although MarkWest believes that the expectations reflected in the forward-looking statements are reasonable, MarkWest can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission (SEC). Among the factors that could cause results to differ materially are those risks discussed in the periodic reports filed with the SEC, including MarkWest's Annual Report on Form 10-K for the year ended December 31, 2012 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading "Risk Factors." MarkWest does not undertake any duty to update any forward-looking statement except as required by law.
Summit Midstream Partners, LP:
This press release includes certain statements concerning expectations for the future that are forward-looking within the meaning of the federal securities laws. Forward-looking statements contain known and unknown risks and uncertainties (many of which are difficult to predict and beyond management's control) that may cause our actual results in future periods to differ materially from anticipated or projected results. An extensive list of specific material risks and uncertainties affecting us is contained in our 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 18, 2013 and other documents and reports filed from time to time with the SEC. Any forward-looking statements in this press release are made as of the date of this press release and SMLP undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.
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MarkWest Energy Partners, L.P.
Frank Semple, 866-858-0482
Chairman, President & CEO
Nancy Buese, 866-858-0482
Senior VP & CFO
Josh Hallenbeck, 866-858-0482
VP of Finance & Treasurer
Summit Midstream Partners, LP
Marc Stratton, 214-242-1966
Vice President and Treasurer
KEYWORDS: United States North America Colorado West Virginia
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